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2005-03-22PLEASE TURN OFF AT CELL PHONES & PAGERS IN COUNCIL CHAMBERS. AGENDA ^ Page 1. Open meeting 2. Action approving agenda, with any amendments 3. Action approving minutes: March 8, 2005 4. Report on Indian Knoll Manor, with any necessary actions 2-14 5. Consideration/action on Contract for Private Redevelopment with 15-95 Mound Harbor Renaissance, LLC Recess meeting 7. Reconvene HRA meeting when CC will discuss redevelopment items 8. (Open City Council Meeting and hold concurrent HRA & CC meetings) 9. Consideration/action on a Resolution Adopting a Redevelopment Plan 96-121 for the Mound Harbor Project Area (This action is taken following the Council hearing and action on the same matter.) 10. Consideration/action on a Resolution Modifying the Tax Increment 122-172 Financing Plan for Tax Increment Financing District No. 1-2 by Eliminating Certain Parcels from Tax Increment Financing District No. 1-2; and Establishing the Mound Harbor Tax Increment Financing District within the Mound Harbor Project Area, and Adopting a Tax Increment Plan Therefore (This action is taken following the Council Hearing and action on the same matter.) 11. Adjourn MOUND HOUSING AND REDEVELOPMENT AUTHORITY MARCH 8, ?.005 The Housing and Redevelopment Authority of and for the City of Mound, Minnesota, met in regular session on Tuesday, March 8, 2005, at 7:15 p.m. in the council chambers of city hall. Members Present: Acting Chair David Osmek, Commissioners John Beise and Mike Specht. Others Present: City Attorney John Dean, Executive Director Kandis Hanson 1. Open Meeting Acting Chair Osmek called the meeting to order at 7:15 p.m. 2. Approve Agenda MOTION by Specht, seconded by Beise to approve the agenda. Motion carried. All voted in favor. 3. Approve Minutes MOTION by Beise, seconded by Specht to approve the minutes of the February 22, 2005 meeting. All voted in favor. Motion carried. Action on request by Lindquest and Vennum on behalf of Commerce Place requesting approval of Certificate of Completion and Termination Aqreement for the contract for Private Development for the shopping center dated July 117 1985. MOTION by Specht, seconded by Beise to approve the following resolution: All voted in favor. Motion carried. RESOLUTION NO. 05-03H: RESOLUTION APPROVING CERTIFICATE OF COMPLETION AND TERMINATION OF CONTRACT FOR PRIVATE REDEVELOPMENT 5. Adjourn MOTION by Beise, seconded by Specht to adjourn at 7:18 p.m. All voted in favor. Motion carried. Attest: Bonnie Ritter, City Clerk Chair Pat Meisel -1- MOUND HRA INDIAN KNOLL APARTMENTS PROPERTY MANAGER'S MONTHLY REPORT March 22, 2005 Manager's Agenda · February Bank Statement · January Income Statement · Review of bills paid · Managers Report · Resident Council Report -2- WELLS FARGO BANK, N.A. NICOLLET MALL OFFICE POST OFFICE BOX B 514 MINNEAPOLIS, MN 55479 PaOe 1 of 3 I-f 479 Account Number: Statement End Date: Number of Enclosures: ~CO3OO) O0O-0O3353O 02/28/05 28 I,l,l,,M,,,Ih,ll,,,I,,I,,,ll,ll,,,,I,II,,,I,I. h.,ll,ll,,I HOUSING & REDEVELOPMENT AUTHORITY SPECIAL ACCOUNT CITY OF MOUND FINANCE DIRECTOR ~l NAVW~ AD MOUND MN B536q-1627 If you have any questions abou~]-i~--statement or y~)-~-r 'ac-~ounts, call: 8(J~25-5~5 your Accounts at a Glance Account Type Basic Business Checking with Interest 000-0033530 Beginning Deposits/ Withdrawals/ Ending Balance Credits Debits Balance 1,084.47 46, 701.61 - 30,251.26 17,534.82 News from Wells Fargo ~.~rBasic Business Checking with Interest 000-0033530 Housing & RedeveloPment Authority Special Account Jan 31 Beginning Balance Fei) 28 Ending Balance Deposits and Credits 1,084.47 17,534.82 Effective Posted Date Date Transaction Detail Feb 02 Deposit Feb O3' De~osit Feb 04 DepoSit Feb 07 Deposit Feb f0 Hud TreaS 303 Misc Pay 021005 410962421860103 RMT VV 099075707 hud Operating Fund MN0740 Feb 10 DelBosit .. Feb 16. Hud .Tre,a.s 303 Misc.P**a.y**O. 21605 .410962421860103 RMT*VV 0922153-13".. hud Cbpitat"FundProgram Feb 17 Hud Treas 303Mis,c, P?.y. 0.'2j1705~ ~10962421860103 iRMT*VV*092215328 ***. * hud CapHal' FUnd Program Feb 22 Deposit Feb 28 'In terest Payment Amou/3t 3,989~82 942.00 6,045.50 357.00 16~321~08 529:00': Withdrawals and Debits ........................................................................................................................ Effective Posted .u Date Date Transaction Detail Amount Feb 02 Overdraft Fee - 33.00 Continued on next page -3- Housing & RedevelOpment Authority Special Account Checks Paid Check # Date Page 2 of 3 480 Account Numb er: 000-0033530 Statement End Date: 02/28/C Amount Check # Date Amount 1821 Feb 01 4,273.52 1836 Feb 28 59.68 1822 Feb 16 850.00 1837 Feb 28 5,000.00 1823 Feb 23 62.00 1842 * Feb 25 169.46 1824 Feb 15 1,157.92 1843 Feb 28 47.34 · 1825 Feb 15 3,046.00 1844 Feb 28 140.00 1826 Feb 22 427.53 1845 Feb 25 6,988.44 1827 Feb 24 214.15 1848 * Feb 25 362.58 1828 Feb 17 47.52 1849 Feb 28 40.43 1829 Feb 17 23.92 1850 Feb 28 125.00 f831 * Feb 22 47.92 1851 Feb 28 82.59 1832 Feb 18 17.50 1855 * Feb 25 763.07 1833 Feb 17 142.98 1858 * Feb 28 1,110.28 1834 Feb 16 56.52 1860 * Feb 24 150.00 1835 Feb 16 4,764.39 1861 Feb 28 47.52 * Gap in Check Sequence ~ Daily Balance Summary ........................................................................................................................ Date Balance Date .Balance Jan 31 1,084.47 Feb 16 19,185.52 Feb 01 - 3,189.05 Feb 17 32,859.54 Feb 02 767.77 Feb 18 32,842.04 Feb 03 4,183.77 Feb. 22 32,895.59 Feb 04 5,125.77 Feb 23 32,833.59 Feb 07 6,336.77 Feb 24 32,469.44 Feb 10 12,739.27 Feb 25 24,185.89 Feb 15 8,535.35 Feb 28 17,5347~ Average Collected Balance $ 17,016.73 Interest Summary ............................................................................................................................... Annual Percentage Yield Earned This Period Interest Earned During This Period Year to .Date Interest and Bonuses Paid Total Interest and Bonuses Earned In 2004 0.14% 1.77 2.68 16.70 Order Business Checks and save 25% off your entire order,* Call 1-800-237-8§82. Wells Fargo's new provider of Business Checks is Harland. When you order checks through Harland, you can be assured that your account information is secure, and the checks you receive will be of the highest quality and are 100% compatible with all major accounting packages, Order Now! Offer ends May 31, 2005, PleaSe reference X-966. *Not valid with any other offer. For Your Interest Thank you for banking with Wells Fargo. -4- A4BIA Summary Statement February 2005 For more information, call MBIA Asset Management at (800)395-5505 Fax: (800)765-7600 Mound Housing and Redevelopment Auth. Account Number: MN-01-0258-2001 Account Name: GENERAL FUND Beginning Contributions Withdrawals Income Average Daily Month End Balance Earned Balance Balance This Month $418,404.19 $0.00 $(I.00 $699.08 $418,762.1(} $419,1(13.27 Fiscal YTD Ending 12/31/0: $417,708.28 $0.00 $0.00 $1,394.99 $418,394.24 $419,103.27 i Account Number: MN-01-0258-2002 Account Name: MOUND [IUD Beginning Contributions Withdrawals Income Average Daily Month End Balance Earned Balance Balance This Month $11,575.32 $0.00 $0.00 $19.35 $ll,585.22 $1..1,594.67 Fiscal YTD Ending 12/31/0.~ $11,556.05 $0.00 $0.00 $38.62 S11,575.04 $11,594.67 Total of all accounts Beginning Contributions Withdrawals Income Average Daily Month End Balance Earned Balance Bahmce ' 3 This Month $429,979.51 $0.00 $0.00 $718.4. $430,347.32 $430,6o7.94 Fiscal YTD $429,264.33 Ending $0.00 $0.00 $1,433.61 $429,969.28 , $430,697.94 February 2005 Page: -5- Statement February 2005 For more information, call MBIA Asset Management at (800)395-5505 Fax: (800)765-7600 Mound Housing and Redevelopment Auth. Account Number: MN-01-0258-200! Account Name: GENERAL FUND Date Description Contributions and Withdrawals Balance Transaction Income Earned Number 02/01/05 Beginning BaLance $418.404.19 Income Earned for the month $699.08 02/28/05 Ending Balance $419,103.27 Summary February 2005 Fiscal YTD Ending (12/31/05) Beginning Balance Contributions Withdrawals Income Earned Month End Balance Average Daily Rates Average Annualized Yield $418,404.19 $0.00 $0.00 $699.08 $419,103.27 2.18% 2.20% $417,708.28 $0.00 $0.00 $1,394.99 $419,103.27 2.06% 2.08% February 2005 Page: 2 -6- A4BIA Statement February 2005 For more information, call MBIA Asset Management at (800)395-5505 Fax: (800)765-7600 Mound Housing and Redevelopment Auth. Account Number: MN-01-0258-2002 Account Name: MOUND HUD Date Description Contributions and Withdrawals Balance Transaction Income Earned Nnmber 02/01/05 Beginning Balance $11.575.32 Income Earned for the month $19.35 02/28/05 Ending Balance $11 594.67 Summary Beginning Balance Contributions Withdrawals Income Earned Month End Balance Average Daily Rates Average Annualized Yield Fehruary 2005 Fiscal YTD Ending (12/31/05) $11,575.32 $0.00 $0.00 $19.35 $11,594.67 2.18% 2.20% $11,556.05 $0.00 $0.00 $38.62 $11,594.67 2.06% 2.O8% February 2005 Page: 3 -7- Mound, MN Public Housin_~ 2020 Commerce Boulevard Mound, MN 55364 As OF January 31,2005 BALANCE SHEET ASSETS 111101- 111700- 112200- 112900- 116200- 121100- 140002- 140003- 140005- 140007- 140008- 140009- 140016- 140017- 140055- 140095- Cash General Fund Petty Cash Tenants Accounts Receivable City of Mound General Fund Investments Prepaid Insurance Development Cost Development Cost Contra Accumlated Depreciation Buildings Furniture,Equipment,Machines-Dwelling Fumiture,Equipment, Machines-Admin Land Improvements Building Improvements Mod Cost Complete Mod Cost Uncomplete TOTAL ASSETS (4,057.08) 100.00 456.82 910.11 11,509.58 6,069.74 1,505,904.64 (2,107,638.55) (1,776,855.74) 1,642,970.53 33,551.61 17,493.01 6,680.00 565,942.47 601,733.91 58,762.33 565r533.38 SURPLUS AND LIABILITIES 211400 - Tenants Security Deposits 211410 - Tenants Pet Deposits 211499 - Security Deposit Interest 212900 - Notes Pay Levy Fund 213700 - Payment in Lieu of Taxes 213701 - PILOT Current Year 280200 - HUD PHA Contribution 280600 - Retained Earnings Current Year Net Activity TOTAL SURPLUS AND LIABILITIES (8,668.00) (2,700.00) (687.26) (70,000.00) (3,897.48) (1,299.09) (308,629.59) (174,117.62) 4,465.66 ~565.533.38~ Mound. MN Public Housin_ 2020 Commerce Boulevard Mound, MN 55364 As Of Januarv 31, 2005 Statement of Operating Receipts & Expenditures 311000 - Dwelling Rental Total Rental Income 361000 - Investment Interest/General Funds 369000 - Other Income 802000 - Operating Subsidy Total Other Operating Receipts Total Receipts Expenses 411200 - Manager Payroll 413000 - Legal Expense 414000 - Staff Training 415000 - Travel 417000 - Accounting Fees 7100 - Auditing Fees :19000 - Sundry-Administrative 419500 - Outside Management Total Administrative Expense 422000 - Tenant Services Total Tenant Services Expense 431000- Water 432000- Electricity 433000- Gas 439000 - Other Utility Expense 439100 - Garbage Removal Total Utilities Expense 440000 - Maintenance & Operation 441000 - Maintenance Labor 442000- Materials 443000 - Contract Costs 448000 - Protective Services Total Maintenance Expense YTD Over Current YTD Prorated .(Under) Activity Balance Budget Budget (10,327.60) (41,952.12) (42,863.32) (10,327.60) (41,952.12) (42,863.32) (911.20) 911.20 (0.91) (3.25) (133.32) (130.07) (229.50) (2,004.15) (920.00) 1,084,15 (6,045.50) (24,181.90) (24,182.00) (0.10) (6,275.91) ~ (26;189.30) (25,235.32) (953.98) (16,603.5t ) (68,141.42) (68,098.64) (42.78) 3,166.66 12,033.64 13,083.32 (1,049.68) 0.00 0.00 233.32 (233.32) 0.00 0.00 466.68 (466.68) 0.00 160.66 266.68 (106.02) 147.92 1,782.68 1,183.32 599.36 0.00 2,000.00 1,833.32 166.68 0.00 3,874.01 7,026.68 (3,152.67) 1,700.00 3,400.00 0.00 3,400.00 5,014.58 23,250.99 24,093.32 (842.33) 0.00 0.00 666.68 0.00 0.00 666.68 (666.66) (666.68) 0.00 321.40 1,333.32 (1,011.92) 0.00 3,418.29 5,900.00 (2,481.71) 0.00 7,451.97 6,300.00 1,151.97 0.00 3,387.31 3,466.68 (79.37) 0.00 1,391.43 1,800.00 (408.57) 0.00 15,970.40 18~800.00 (2,829.60) 0.00 2,376.00 16,626.68 (14,250.68) 3,587.00 11,711.00 0.00 11,711.00 50.35 2,557.85 2,666.68 (108.83) 64.11 3,304.33 2,240.00 1,064.33 0.00 0.00 233.32 (233~32) 3,70t .46 19~949.18 21,766.68 (1,817.50) 2 Mound. MN Public Housin_~ 2020 Commerce Boulevard Mound. MN 55364 As Of Januarv 31. 2005 Statement of Operating Receipts & Expenditures 451000- Insurance 452000 - Pmts In Lieu Of Taxes 454000 - Employee Benefit Contributions 457000 - Collection Loss Total General Expense YTD Over Current YTD Prorated '(Under) Activity Balance BudRet Bud~let 1,052.38 3,266.20 3,473.32 (207.12) 516.38 1,299.09 2,406.68 (1,107.59) 1,265.43 5,640.17 3,940.00 '1,700.17 0.00 773.05 0.00 773.05 2,834.19 t0,978.51 9~820.00 1,158.51 Total Routine Expense 601000 - Prior Year Adjustments-Cash Total Nonroutine Expense Total Expense 11,550.23 70,149.08 75~146.68 (4~997.60) 0.00 2,458.03 0.00 2,458.03 0.00 2,458.03 0.00 2,458.03 11 ~550.23 72,607.11 75~ 46.68 (2~539.57) 3 INDIAN KNOLL MANOR 2020 COMMERCE BLVD MOUND, MN 55364 VENDOR VENDOR NUMBER NAME PAID INVOICES SORTED BY VENDOR FROM March 1, 2005 THROUGH March 31, 2005 March 15, 2005 CHECK ACCTG CHECK M INVOICE INVOICE CUMULATIVE DATE DATE NUMBER S NUMBER AMOUNT TOTAL 3 PROGRAMMED MANAGEMENT CORP 03-10-2005 MAR2005 1878 S 70325124 72.92 TOTAL PAID 72.92 72.92 6 WESTPORT PROPERTIES INC 03-10-2005 MAR2005 1882 S 02/05 POSTAGE 15.49 6 WESTPORT PROPERTIES INC 03-10-2005 MAR2005 1882 S 03/05 RECURRING 30.00 TOTAL PAID 45.49 118.41 7 WESTPORT PROPERTIES PAYROLL 03-15-2005 MAR2005 1885 S 03/15/05 PAY 3676.28 TOTAL PAID 3676.28 3794.69 .................................................................................................................................. 34 HOME DEPOT CREDIT SERV-MOUND 03-10-2005 9tAR2005 1874 S 6035322006499994 80.47 TOTAL PAID 80.47 3875~16 52 RETAIL SERVICES/MENARDS 03-10-2005 MAR2005 1880 S 302402105096182 48.98 52 RETAIL SERVZCES/MEN~S 03-10-2002 ~2005 1880 S 302403405099461 4.39 52 RETAIL SERVICES/MENAR~S 03-10-2005 MAR2005 1880 S 302403902090729 38.83 f?] RETAIL S~RVZCES/ME~ARDS 03-10-2005 MAR2005 1880 S 02/19/05 FI~ CHRG 1.26 TOTAL PAID 93.46 3968.62 54 RENTAL RESEARCH SERVICES, INC.03-10-2005 MAR2005 1879 S Y87232 FEB 34.50 TOTAL PAID 34.50 4'003.12 56 CenterPoint Energy 03-10-2005 MAR2005 1871 S 543-002-050-900 MAR 525.00 56 CenterPoint Energy 03-10-2005 MAR2005 1871 S 543-002-931-401 MAR 1952.00 TOTAL PAID 2477.00 6480.12 93 BFI WASTE SERVICES 03-10-2005 MAR2005 1868 S 1020011133560505200 503.87 TOTAL PAID 503.87 6983.99 95 B SYLVESTER, LLC 03-10-2005 MAR2005 1867 S MTCS MAR05 62.00 TOTAL PAID 62.00 7045.99 99 MINNESOTA ELEVATOR INC 03-10-2005 MAR2005 1875 S 68605 181.29 TOTAL PAID 181.29 7227.28 -11- INDIAN KNOLL MANOR 2020 COMMERCE BLVD MOUND, MN 55364 PAID INXY0ICES SORTED BY VENDOR FROM February 1, 2005 THROUGH February 28, 2005 March 15, 2005 PAGE: ~ VENDOR VENDOR CHECK ACCTG CHECK M INVOICE INVOICE CUMULATIVE NUMBER NAME DATE DATE NUMBER S NUMBER AMOUNT TOTAL 56 CenterPoint Energy 02-14-2005 FEB2005 1825 S 543-002-050-900 JAN 525.00 56 CenterPoint Energy 02-14-2005 FEB2005 1825 S 543-002-931-401 JAN 2521.00 TOTAL PAID 3046.00 12028.38 62 Minnesota Multi Housing Assoc 02-14-2005 FEB2005 1830 S 2005 MEMBER DUES 91.68 TOTAL PAID 91.68 12120.06 .................................................................................................................................. 87 Office Depot 02-23-2005 FEB2005 1852 S 274504554-001 38.12 87 Office Depot 02-23-2005 FEB2005 1852 S 274717450-001 62.54 87 Office Depot 02-23-2005 FEB2005 1852 S 2743433369-001 127.56 TOTAL PAID 228.22 12348.28 92 CULLIGAN 02-23-2005 FEB2005 1842 S 101X14936101 169.46 TOTAL PAID 169.46 12517.74 93 BFI WASTE SERVICES 02-23-2005 FEB2005 1839 S 102001113356050100 460.15 TOTAL PAID 460.15 12977.89 95 B SYLVESTER, LLC 02-14-2005 FEB2005 1823 S 01/05 MTCS 62.00 95 B SYLVESTER, LLC 02-23-2005 FEB2005 1838 S 02/05 MTCS 62.00 TOTAL PAID 124.00 13101.89 99 MINNESOTA ELEVATOR INC 02-23-2005 FEB2005 1848 S 65329 181.29 99 MINNESOTA ELEVATOR INC 02-23-2005 FEB2005 1848 S 66915 181.29 TOTAL PAID 362.58 13464.47 100 FRONTIER 02-23-2005 FEB2005 1862 S 9524725075 FEB05 437.92 100 FRONTIER % 02-14-2005 FEB2005 1826 S 952472507807161712 427.53 TOTAL PAID 865.45 14329.92 101 C NABER and ASSOCIATES 02-23-2005 FEB2005 1841 S 30393 103.00 101 C NABER and ASSOCIATES 02-23-2005 FEB2005 1841 S 30652 103.00 TOTAL PAID 206.00 14535.92 -12- INDIA~N KNOLL MANOR 2020 COMMERCE BLVD MOUND, MN 55364 VENDOR VENDOR NUMBER NAME PAID INVOICES SORTED BY VENDOR FROM February 1, 2005 THROUGH February 28, 2005 March 15, 2005 CHECK ACCTG CHECK M INVOICE INVOICE CUMULATIVE DATE DATE NUMBER S NUMBER AMOUNT TOTAL 3 PROGR3%MMED MANAGEMENT CORP 02-14-2005 FEB2005 1831 S 70325023 47.92 TOTAL PAID 47.92 47.92 WESTPORT PROPERTIES INC 02-14-2005 FEB2005 1834 S 12310405356 31.04 WESTPORT PROPERTIES INC 02-14-2005 FEB2005 1834 S 01/05 POSTAGE 10.48 WESTPORT PROPERTIES INC 02-03-2005 FEB2005 1822 S 01/05 MGMT FEE 850.00 WESTPORT PROPERTIES INC 02-28-2005 FEB2005 1864 S 02/05 MGMT FEE 850.00 WESTPORT PROPERTIES INC 02-14-2005 FEB2005 1834 S 02/05 RECURRING 15.00 TOTAL PAID 1756.52 1804.44 7 WESTPORT PROPERTIES PAYROLL 02-14-2005 FEB2005 1835 S FEB15 PAYROLL 4764.39 TOTAL PAID 4764.39 6568.83 14 VALSPA.R PAINT 02-14-2005 FEB2005 1833 S 7874461 142.98 TOTAL PAID 142.98 6711.81 XCEL ENERGY 02-23-2005 FEB2005 1858 S 1920-008-243-027 1110.28 TOTAL PAID 1110.28 7822.09 34 HOME DEPOT CREDIT SERV-MOUND 02-14-2005 FEB2005 1827 S 6035322006499994JAN 214.15 TOTAL PAID 214.15 8036.24 36 STS FLOORING INC 02-23-2005 FEB2005 1855 S 36234 763.07 TOTAL PAID 763.07 8799.31 40 HOME DEPOT SUPPLY 02-23-2005 FEB2005 1846 S 28377404 19.16 TOTAL PAID 19.16 8818.47 52 RETAIL SERVICES/MENARDS 02-23-2005 FEB2005 1854 S 302401005094001 41.32 52 RETAIL SERVICES/MENARDS 02-23-2005 FEB2005 1854 S 302435704031169 42.59 TOTAL PAID 83.91 8902.38 54 RENTAL RESEARCH SERVICES, INC.02-14-2005 FEB2005 1832 S Y87232 DEC 17.50 54 RENTAL RESEARCH SERVICES, INC,02-23-2005 FEB2005 1853 S Y87232 JAN05 62.50 TOTAL PAID 80.00 8982.38 -13- INDIAN KNOLL MANOR 2020 COMMERCE BLVD MOUND, MN 55364 PAID INVOICES SORTED BY VENDOR FROM February 1, 2005 THROUGH February 28, 2005 March 15, 2005 PAGE: VENDOR VENDOR CHECK ACCTG CHECK M INVOICE INVOICE CUMULATIVE NUMBER NAME DATE DATE NUMBER S NUMBER AMOUNT TOTAL 102 MOUND TRUE VALUE ~LARDWARE 102 MOUND TRUE VALUE HARDWARE 102 MOUND TRUE VALUE HARDWARE 102 MOUND TRUE VALUE F~ARDWARE 102 MOUND TRUE VALUE HARDWARE 102 MOUND TRUE VALUE HARDWARE 02-14-2005 FEB2005 1829 S 1196 12.85 02-14-2005 FEB2005 1829 S 1437 11.07 02-23-2005 FEB2005 1849 S 2172 14.47 02-23-2005 FEB2005 1849 S 2351 23.47 02-23-2005 FEB2005 1849 S 2570 1.99 02-23-2005 FEB2005 1849 S 01/05 FIN CHRG .50 TOTAL PAID 64.35 14600.27 103 ADAMS PEST CONTROL INC 02-23-2005 FEB2005 1836 S 197670 59.68 TOTAL PAID 59.68 14659.95 104 CITY OF MOUND 02-14-2005 FEB2005 1824 S 9442343015018 JAN 1157.92 TOTAL PAID 1157.92 15817.87 105 IKON OFFICE SOLUTIONS 02-14-2005 FEB2005 1828 S 23570789 47.52 105 IKON OFFICE SOLUTIONS 02-23-2005 FEB2005 1861 S 23611164 47.52 TOTAL PAID 95.04 15912.91 108 Abdo, Eick, & Meyers LLP 02-23-2005 FEB2005 1837 S 216550 5000.00 TOTAL PAID 5000.00 20912.91 111 Cingular/AT&T Wireless 02-23-2005 FEB2005 1843 S 13225982 JAN05 47.34 TOTAL PAID 47.34 20960.25 .................................................................................................................................. 119 NEEDLES SUPPLY, INC 02-23-2005 FEB2005 1851 S 130867 82.59 TOTAL PAID 82.59 21042.84 125 IKON FINANCIAL SERVICE - LEASE02-23-2005 FEB2005 1847 S 64513952 133.13 TOTAL PAID 133.13 21175.97 129 Electro Watchman, Inc 02-23-2005 FEB2005 1860 S 25258 150.00 TOTAL PAID 150.00 21325.97 137 Karen Rondeau 00-00-0000 SEP2004 1691 S 2020/311 RET S/D 383.28 TOTAL PAID 383.28 21709.25 -14- 5341 Maywood Road Mound, MN 55364 (952) 472-3190 Memorandum To: From: Date: Mound HRA Sarah Smith, Comm. Dev. Director March 18, 2005 Mound Harbor Redevelopment Agreement Attached for the HRA agenda packet, please find the latest draft of the MHR Redevelopment Contract. This will be considered at the March 22 HRA meeting. Members of the HRA are advised that the City Attomey will be present to answer any questions as will representives from Mound Harbor Renaissance. -15- EXECUTION: ,2005 vl0 3/17/05 CONTRACT FOR PRIVATE REDEVELOPMENT By and Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA And MOUND HARBOR RENAISSANCE DEVELOPMENT, LLC This document was drafted by: Krass Monroe, P.A. 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437 -16- Section 1.1. TABLE OF CONTENTS ARTICLE I Definitions Page Definitions .............................................................................................................. 2 Section 2.1. Section 2.2. ARTICLE II Representations, Warranties and Covenants Representations and Covenants by the Authority .................................................. 8 Representations, Warranties and Covenants by the Redeveloper .......................... 8 Section 3.1. Section 3.2. Section 3.3. Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Section 4.7. Section 4.8. Section 4.9. Section 4.10. ARTICLE 1II Land Use and Development Controls; City Actions Conditions of City/Authority Approval ............................................................... 10 Subdivision and Land Use Approvals .................................................................. 10 Additional City Actions ....................................................................................... 12 ARTICLE IV Acquisition and Conveyance of the Redevelopment Property Statement of Intent ............................................................................................... 13 Acquisition ........................................................................................................... 13 Request to Condemn; Authority Decision ........................................................... 13 Security and Payment ........................................................................................... 13 Additional Conditions to Authority Obligation ................................................... 14 Consultation with the Redeveloper ...................................................................... 15 Discontinuation .................................................................................................... 15 Conveyance of the Authority Parcels to the Redeveloper ............................................................................................. 16 Conditions Precedent to Conveyance ................................................................... 18 Dump Remediation; Conveyance of Lost Lake Authority Parcel to Redeveloper ....................................................................... 19 i Section Section Section Section Section Section Section Section Section Section 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. 5.8. 5.9. 5.10. ARTICLE V Financing; Tax Increment and Other Public Assistance Creation of Tax Increment District; Certification ................................................ 22 Tax Increment Financing ..................................................................................... 22 City Bonds ............................................................................................................ 22 Authority Bonds ................................................................................................... 23 Conditions to Issuance of Authority Bonds ......................................................... 23 Tax Increment Notes ............................................................................................ 25 Assignment of Tax Increment Notes .................................................................... 26 Use of Tax Increment; Priorities .......................................................................... 27 Capitalized and Construction Period Interest ....................................................... 27 Administration of Project Revenues .................................................................... 27 Section Section Section Section Section Section Section Section 6.1. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8. ARTICLE VI Construction of Site Improvements and Minimum Improvements Public Improvements ............................................................................................ 28 Construction of Minimum Improvements and Site Improvements ............................................................................................. 28 Permits and Fees .................................................................................................. 28 Demolition ............................................................................................................ 28 Soil Corrections and Contamination .................................................................... 28 Concept Plan and Construction Plans .................................................................. 28 Commencement and Completion of Construction ............................................... 30 Certificate of Completion ..................................................................................... 31 Section 7.1. Section 7.2. Section 7.3. Section 7.4. Section 7.5. ARTICLE VII Determination of the Feasibility of a Phase; Payment of Certain Amounts to Redeveloper Determination o f Feasibility ................................................................................ 32 Effect of Redeveloper Electing not to Proceed with a Phase ....................................................................................................... 32 Effect of Completion of all Three Phases ............................................................ 33 Determination of Land Sales Prices ..................................................................... 33 Payment of Fees ................................................................................................... 34 ii Section 8.1. Section 8.2. Section 8.3. ARTIeLI2 VIII Lost Lake Tax Deficiency Guarantee; Letter of Credit; Maxwell Mortgage Lost Lake Tax Deficiency Guarantee .................................................................. 35 Letter of Credit ..................................................................................................... 36 Maxwell Mortgage ............................................................................................... 37 Section 9.1. Section 9.2. Section 9.3. Section 9.4. ARTICLE IX 110 South Right of First Refusal Right of First Refusal ........................................................................................... 38 Election to Exercise Right .................................................................................... 38 Non-Exercise of Right .......................................................................................... 38 Inclusion of Parcels in a Tax Increment District .................................................. 38 C Section 10.1. Section 11.1. Section 11.2. Section 11.3. Section 12.1. Section 12.2. Section 12.3. Section 12.4. Section 12.5. Section 12.6. ARTICLE X Insurance Insurance .................................................................. 3 9 ARTICLE XI Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment ................................................................... 40 Prohibition Against Transfer of Property and Assignment of Agreement ................................................................................. 40 Release and Indemnification Covenants .............................................................. 41 ARTICLE XII Events of Default Redeveloper Events of Default ............................................................................ 42 Authority Events of Default ................................................................................. 42 Authority Remedies on Default ........................................................................... 42 Redeveloper Remedies on Default ....................................................................... 43 No Remedy Exclusive .......................................................................................... 43 No Additional Waiver Implied by One Waiver ................................................... 43 111 Section 13.1. Section 13.2. Section 13.3. Section 13.4. Section 13.5. Section 13.6. Section 13.7. Section 13.8. Section 13.9. Section 13.10. ARTICLE XIII Additional Provisions Conflict of Interest ............................................................................................... 44 Arbitration ............................................................................................................ 44 Authority Representatives Not Individually Liable ............................................. 44 Equal Employment Opportunity .......................................................................... 45 Restrictions on Use .............................................................................................. 45 Business Subsidy .................................................................................................. 45 Titles of Articles and Sections ............................................................................. 45 Notices and Demands ........................................................................................... 45 Memorandum of Contract .................................................................................... 46 Counterparts ......................................................................................................... 46 Section 14.1. Section 14.2. Section 14.3. ARTICLE XIII Termination of Agreement Termination .......................................................................................................... 47 Sections to Survive Termination .......................................................................... 47 Termination as to Individual Phase ...................................................................... 47 SIGNATURES EXHIBITS Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H Exhibit I Exhibit J Exhibit K Exhibit L Exhibit M Exhibit N Description of Redevelopment Property .................................................................... 50 Site Plan ..................................................................................................................... 52 Certificate of Completion ........................................................................................... 53 Revenue Note .............................................................................................................. 55 Public Improvements .................................................................................................. 59 Site Improvements ...................................................................................................... 60 Description of Minimum Improvements .................................................................... 61 Declaration of Restrictive Covenants and Prohibition Against Tax Exemption ........................................................................................... 62 Parcels in 110 South ................................................................................................... 64 Pro Forma ................................................................................................................... 65 Eligible Project Costs ................................................................................................. 66 Redevelopment Property Deed ................................................................................... 67 Maxwell Mortgage ...................................................................................................... 69 City Fee Schedule ....................................................................................................... 73 iv CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made as of the __ day of ., 2005, by and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA (the "Authority"), a public body corporate and politic (the "Authority"), having ita principal offices at 5342 Maywood Road, Mound, Minnesota 55364, and MOUND HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company (the "Redeveloper"), having offices at 1521 - 94th Lane NE, Minneapolis, Minnesota 55449. WHEREAS, the City of Mound (the "City") and the Authority have established or will establish the Mound Harbor Project Area (the "Project Area") under the authority of Minnesota Statutes, Chapter 469 (the "Act"), and in accordance with the provisions of this Agreement, and subject to all applicable requirements of the Act, intend to establish, within the Project Area, a Tax Increment Financing District (the "Tax Increment District") and to adopt a Tax Increment Financing Plan (the "Tax Increment Plan") for the Tax Increment District to facilitate the financing of public development and redevelopment costs in the Project Area; and WHEREAS, the Authority deems it to be in the public interest to facilitate and encourage redevelopment of the Project Area by a combination of public and private activity within the Project Area and in accordance with the Tax Increment Plafi to be adopted; and WHEREAS, the Redeveloper has proposed a development (hereinafter defined as the "Project") within such Project Area which the Authority believes will promote and carry out the objectives for which redevelopment is undertaken, will be in the vital best interests of the City, will promote the health, safety, morals, and welfare of its residents and will be in accord with the public purposes and provisions of the applicable state and local laws and requirements under which activities within the Project Area have been undertaken and are being assisted; and WHEREAS, the Redeveloper is willing to purchase property within the Project Area, such property being legally described in the attached Exhibit A (hereinafter defined as the "Redevelopment Property") and to develop the Redevelopment Property in phases at its election in accordance with this Agreement as more particularly described in Articles VI and VII hereof; and WHEREAS, consistent with the Tax Increment Plan, the Authority is willing to provide financial assistance in accordance with the provisions of this Agreement, and to induce the City to provide the assistance outlined in this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual obligation of the parties hereto, each of them does hereby covenant and agree with the other as follows: -21 - ARTICLE I DEFINITIONS Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Section 469.001 et seq., as amended. "Administrative Expenses" means administrative expenses of the Authority related to the Tax Increment District, as defined in and to the extent permitted by Section 469.176, subd. 3 of the Tax Increment Act. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Assessor's Market Value" means the market value of a parcel of real property for calculation of real property taxes as determined by the County Assessor (including any final adjustment by any assessor, board of equalization, Commissioner of Revenue or any court). "Auditors Road" means that portion of the Redevelopment Property identified as such on Exhibit A and intended to be constructed as either Phase II or 1II of the Project, as the Redeveloper elects. "Authority" means the Housing and Redevelopment Authority in and for the City of Mound, Minnesota. "Authority Bonds" shall mean the Taxable TI Bonds and the Tax Exempt TI Bonds. "Authority Event of Default" means an action by the Authority or the City described in Section 12.2. "Authority Parcels" means (a) any parcels of the Redevelopment Property owned by the City or the Authority on the date hereof or subsequently acquired by either the City or the Authority; (b) any other parcels or tracts within the Development Property as to which the Redeveloper is unable to acquire marketable title through negotiations (including gaps, gores, and property which is subject to boundary disputes and survey issues), and which the Authority acquires through eminent domain pursuant to Article IV, and (c) portions of County Road 15 released by the County and with respect to which title has passed to either the City or the Authority. "Board" means the Board of Commissioners of the Authority. "Bond Counsel" means Kennedy & Graven, Chartered, or any other nationally-recognized bond counsel selected by the City and the Authority. "Building" means each of the structures described in the Minimum Improvements and shown on the Site Plan. "Certificate of Completion" means the certification in the form of Exhibit C to be provided to the Redeveloper upon completion of a Building in any Phase pursuant to Section 6.8. 2 "City" means the City of Mound, Minnesota. "City Bonds" means, collectively, any outstanding City Cleanup Bonds, City PI Bonds and City Parking Ramp Bonds. "City Cleanup Bonds" means any taxable or tax exempt bonds issued by the City to pay for remediation of the dump located in Lost Lake as provided in Section 4.10. "City PI Bonds" means any taxable or tax exempt special assessment bonds issued by the City pursuant to M.S. Chapter 429 to pay for certain Public Improvements and referred to in Section 5.3. "City Parking Ramp Bonds" means any taxable or tax exempt special assessment bonds issued by the City pursuant to M.S. Chapter 429 or 459 and referred to in Section 5.3 to pay for a portion of the cost of the Parking Ramp. "Closing" means, as to any Phase, the date on which title to Authority Parcels within that Phase are conveyed to the Redeveloper. "Code" means the Internal Revenue Code of 1986, as amended. "Commencement of Construction" means, as to any Phase, excavation for the purpose of setting footings or foundation. "Completion of Construction" means substantial completion of a Building such that a Certificate of Completion may be issued. "Concept Plan" means the preliminary design and architectural plans for the Project submitted by the Redeveloper and considered by the Authority on September 15, 2004, including any revisions to such plans as provided in Section 6.6(a). "Construction Loan" means a loan from a construction lender to finance the construction of any Phase of the Project. "Construction Plans" means the plans, specifications, drawings and related documents for each Phase of the Minimum Improvements, as set forth in Section 6.6(b). "County" means the County of Hennepin, Minnesota. "Custer Parcel" means the real property in Auditors Road at 5533 Shoreline Drive and currently having the property identification number 13-117-24-33-0076. "Declaration of Restrictive Covenants and Prohibition Against Tax Exemption" means those restrictive covenants substantially in the form of Exhibit H. "Deferred Developer Fee" means a fee of four percent (4%) of total Project Costs (excluding the Developer Fee) for the Project (but not to exceed $750,000, plus interest) and paid to the Redeveloper from land sales proceeds as set forth in Article VII. "Deferred Tax Increment Note" has the meaning given to that term in Section 5.6(c). 3 "Developer Fee" for a Phase means (i) five and one-half percent (5.50%) of total Project Costs for the Phase, excluding the Management Fee, plus (ii) ten percent (10%) of the total land sales proceeds net of sales costs and paid to the Redeveloper from land sales proceeds as set forth in Article VII. "Eligible Project Costs" are listed on Exhibit K and represent qualified costs under the Tax Increment Act paid or reimbursed by the Authority to the Authority, the Redeveloper or the City with the proceeds of City Bonds or Authority Bonds or with Tax Increment. "Feasible" or "Feasibility" shall have the meaning given to those terms in Section 7.1. "Final Plat" means the final plat or replat for any Phase of the Project when approved by the City and the County. "Gap Tax Increment Note" has the meaning given to that term in Section 5.6(b). "Langdon Lake" means that portion of the Redevelopment Property identified as such on Exhibit A and intended to be constructed as either Phase II or III of the Project. "Letter of Credit" means the irrevocable letter of credit to be provided by the Redeveloper to the Authority pursuant to Section 8.2 to secure the Tax Deficiency Guarantee. "Lost Lake" means that portion of the Redevelopment Property identified as such on Exhibit A and intended to be constructed as Phase I of the Project. "Lost Lake Authority Parcel" means the portion of Lost Lake owned by the City and identified in Exhibit A. "Management Fee" for a Phase means a fee payable to the Redeveloper equal to ten percent (10%) of Project Costs (excluding the Developer Fee and the Deferred Developer Fee) for that Phase and payable from land sales proceeds as set forth in Article VII. "Master Drainage Plan" means the Master Drainage Plan for any Phase or any appropriate portion thereof, prepared by the Redeveloper and approved by the City. "Master Grading Plan" means the Master Grading Plan for any Phase or any appropriate portion thereof, prepared by the Redeveloper and approved by the City. "Maxwell Mortgage" means the mortgage and security agreement in the form of Exhibit M executed and delivered by the Redeveloper pursuant to Sections 4.10(d)(8) and 8.3, and which conveys to the Authority a first mortgage lien on that portion of the real property in Lost Lake designated by the property identification numbers 13-117-24-33-0063 and 13-117-24-33-0075 which is to be redeveloped by the Redeveloper for a commercial use and not for housing. "Metro Transit Parcel" means the real property in Auditors Road designated by the property identification number 13-117-24-33-0009. "Minimum Market Value" means the agreed minimum Assessor's Market Value for Lost Lake set forth in Section 8.2. 4 "Minimum Improvements" means the improvements to loe eonstmetec113y the Recleveloper ox the Redevelopment Property as shown on the Site Plan attached as Exhibit B, described in Exhibit O and to be further described in the Construction Plans. "Minnesota Environmental Policy Act" means Minnesota Statutes, Section 116D.01 et seq., as amended. "MPCA" means the Minnesota Pollution Control Agency. "Minnesota Environmental Rights Act" means Minnesota Statutes, Section 116B.01 et seq., as amended. "National Environmental Policy Act" means 42 U.S.C. Section 4311 et seq., as amended. "110 South" means the parcels identified on Exhibit I. "Parking Ramp" means the parking ramp to be constructed by the Redeveloper as part of Auditors Road. "Phase I" means the Lost Lake portion of the Redevelopment Property shown on Exhibit B. "Phase I Minimum Improvements" means the Minimum Improvements to be constructed within Phase I as described in the Concept Plan. "Phase II" means, at the Redeveloper's election, either Auditors Road or Langdon Lake. The Redeveloper may elect to proceed with Langdon Lake as Phase II only if doing so does not render Auditors Road not Feasible. "Phase II Minimum Improvements" means the Minimum Improvements to be constructed within Phase II as described in the Concept Plan. "Phase m" means whichever of Langdon Lake or Auditors Road that was not constructed as Phase II. "Phase III Minimum Improvements" means the Minimum Improvements to be constructed within Phase HI as described in the Concept Plan. "Plan" means, collectively, (i) the Development Program adopted by the Authority and approved by the City for the Mound Harbor Project Area, and (ii) the Tax Increment Plan. "Pro Forma" means the Redeveloper's projected Project sources and uses schedule for all three Phases, initially in the form attached as Exhibit J but subsequently adjusted, if necessary, to reflect market conditions. "Project" means the Redevelopment Property and up to three Phases of Minimum Improvements as contemplated herein. "Project Area" means the Mound Harbor Project Area established in accordance with the Act. 5 "Project Costs" for a Phase means all costs of the Project as shown on the Pro Forma under generally accepted accounting principles, including the Management Fee, the Developer Fee and the Deferred Developer Fee. "Project Revenues" for a Phase shall mean all available cash sources for that Phase, including: (i) any excess of Project Revenues over Project Costs for a prior Phase, (ii) Authority Bond proceeds, net of costs of issuance, debt service reserves, capitalized interest and other items which reduce bond proceeds available to the Project, (iii) proceeds of City Bonds, net of costs of issuance, debt service reserves, capitalized interest and other items which reduce bond proceeds available to the Project, (iv) grants, (v) land sales proceeds net of sales costs, (vi) the amount of any shortfall funded by the City, the Authority or the Redeveloper to render a Phase Feasible, and (vii) the projected present value (calculated at a discount rate of seven and one-half percent (7.5%)) of any Tax Increment not required for debt service on the City Bonds and the Authority Bonds for such Phase (using the assumptions contained in the Pro Forma adjusted, if necessary, for market conditions). "Public Improvements" means the public improvements to be constructed by the Redeveloper on or adjacent to the Redevelopment Property and described in Exhibit E. Some of the Public Improvements will be constructed by the City and are so indicated on Exhibit E. "PUD Agreement" means the Planned Unit Development Agreement (or Agreements) to be negotiated, approved, executed, and recorded against each Phase of the Redevelopment Property by the City and the Redeveloper. "Redeveloper" means Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company, and its permitted successors or assigns. "Redeveloper Event of Default" means an action by the Redeveloper described in Section 12.1. "Redevelopment Property" means the real property upon which the Minimum Improvements are to be constructed, which real property is described in Exhibit A and which consists of Lost Lake, Auditors Road and Langdon Lake. "Redevelopment Property Deed" means the quit claim deed, substantially in the form attached as Exhibit L, to be used to convey Authority Parcels to the Redeveloper. "Regulations" means the Treasury Regulations promulgated under the Code, as amended. "Shortfall Tax Increment Note" has the meaning given to that term in Section 5.6(a). "Site Improvements" means the improvements to be constructed on the Redevelopment Property by the Redeveloper described in Exhibit F and in Article VI. "Site Plan" means the plan attached as Exhibit B showing the nature and location of the Minimum Improvements. "State" means the State of Minnesota. "Tax Deficiency Guarantee" has the meaning given to that term in Section 8.1. 6 "Tax Exempt Obligations" means City Bonds and Authority Bonds the interest on which is not includable in gross income for federal income tax purposes. "Tax Exempt TI Bonds" shall mean the tax increment bonds issued by the Authority pursuant to Section 5.4(b). "Tax Increment" means that portion of the real property taxes paid with respect to the Redevelopment Property which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Section 469.174 et seq., as amended. "Tax Increment District" means a Tax Increment Financing District which includes the Redevelopment Property and (if possible) 110 South to be created by the Authority and the City within the Mound Harbor Project Area pursuant to the Tax Increment Act. "Tax Increment Notes" mean the Gap Tax Increment Notes, the Shortfall Tax Increment Notes and the Deferred Tax Increment Notes. "Tax Increment Plan" means the Tax Increment Financing Plan adopted for the Tax Increment District. "Taxable TI Bonds" shall mean the tax increment bonds issued by the Authority pursuant to Section 5.4(a). "Termination Date" means the expiration date of this Agreement described in Article XIV. "Unavoidable Delays" means unexpected delays which are the direct result of adverse weather conditions, shortages of materials, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements, litigation commenced by third parties which by injunction or other judicial action directly results in delays, or acts of any federal, state or local governmental unit other than those provided for under this Agreement or any other cause or force majeure beyond the control of Redeveloper which directly results in delays. "Underwriter" means an investment banking firm selected by the Authority after consultation with the Redeveloper. 7 ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1. Representations and Covenants by the Authority. The Authority makes the following representations and covenants as the basis for the undertaking on its part herein contained: (a) The Authority is a public body corporate and politic and a political subdivision of the State of Minnesota and is governed by a board of commissioners. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has or will create, adopt and approve the Project Area in accordance with the terms of the Act. (c) The Authority will undertake, in good faith, to comply with all statutory requirements of the Act relating to the creation of the Tax Increment District. (d) The Authority has received no notice or communication from any local, state or federal official that the activities of the Redeveloper, the City or the Authority in the Project Area with respect to the Minimum Improvements may or will be in violation of any environmental law or regulation. (e) The Authority will cooperate with the Redeveloper to obtain, in a timely manner, all required permits, licenses and approvals for the Minimum Improvements and the Construction Plans. (f) The Authority proposes to assist the Redeveloper for the costs of Site Improvements in accordance with the Plan and this Agreement. (g) sources. The Authority will assist the Redeveloper in seeking available grants and other funding (h) The Authority proposes to issue the Authority Bonds and the Tax Increment Notes in accordance with the provisions of this Agreement and to pledge Tax Increment to the payment of the principal of and interest on the Authority Bonds and the Tax Increment Notes according to their terms. (i) The Authority will cooperate with the Redeveloper with respect to any litigation commenced by third parties in connection with this Agreement. Section 2.2. Representations, Warranties and Covenants by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a Minnesota limited liability company organized and in good standing under the laws of the State. (b) The Redeveloper has the power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement. (c) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated thereby, nor the fulfillment of the terms and conditions thereof conflicts with or results in a breach of any of the terms or conditions of the Redeveloper's organizational documents or 8 any agreement or instrument to which the Redeveloper is now a party or by which it is hound, or constitutes a default under any of the foregoing. (d) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper, the City or the Authority in the Project Area with respect to the Minimum Improvements may or will be in violation of any environmental law or regulation. (e) If the conditions precedent to construction occur, including the Redeveloper' s election to proceed with a Phase, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Plan and all local, state and federal laws and regulations. (f) If the conditions precedent to construct/on occur, the Redeveloper reasonably believes that the financing arrangements which the Redeveloper has obtained or will obtain to finance construction of the Minimum Improvements will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as contemplated in this Agreement. (g) The construction of the Minimum Improvements, in the opinion of the Redeveloper, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the assistance provided by the Authority pursuant to this Agreement. (h) Once acquired by the Redeveloper, the Redevelopment Property shall not become exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, and any improvements of any kind constructed on the Redevelopment Property shall similarly not become exempt until after the dissolution or other termination of the Tax Increment District. (i) The Redeveloper agrees, notwithstanding the provisions of Article XI, that it will not assign, convey or lease (except as set forth in the next sentence) any interest in the Redevelopment Property or any portion thereof, or this Agreement or any portion thereof, to any tax-exempt entity under the U.S. Internal Revenue Code of 1986, as the same may be amended from time to time, without the prior written approval of the Authority. A lease of an interest or portion of the Redevelopment Property shall not be prohibited by this subparagraph unless it results in an exemption of the Redevelopment Property from ad valorem property taxes pursuant to subparagraph (h) above. (j) The Redeveloper will reimburse the Authority for relocation services and benefits to which owners or tenants of the Redevelopment Property may be legally entitled. The Redeveloper may, in lieu of funding such services and benefits, provide a written waiver by the owner or tenant. Such waiver must be in a form acceptable to the Authority, provided that no such waiver shall work to release the Redeveloper from its obligation to reimburse the Authority for all claims for relocation benefits and assistance in the event that such waiver shall be determined invalid. (k) The Redeveloper will reimburse the City and the Authority for legal fees and other costs incurred after the application of insurance in defending any action challenging the creation of the Tax Increment District, up to a maximum reimbursement of $25,000. 9 ARTICLE III LAND USE AND DEVELOPMENT CONTROLS; CITY ACTIONS Section 3.1. Conditions of City/Authority Approval. (a) Except as set forth in subparagraph (b) below, the Redeveloper shall not permit any construction to occur with respect to any Phase until the Redeveloper has satisfied or caused to be satisfied each of the following conditions subsequent (unless otherwise noted below): (1) The Redeveloper acquires title to (or requests condemnation of) all of the Redevelopment Property required for the Phase, and executes this Agreement and the PUD Agreement and causes any lien holder affecting any of the Redevelopment Property to subject its interest as provided herein to this Agreement and the PUD Agreement; (2) The Redeveloper satisfies all of the conditions subsequent to the Council's approval of the Preliminary Plat as set forth in the City's resolution approving the Preliminary Plat; (3) The City and the County have approved the Final Plat for the Phase; (4) The Redeveloper has recorded the Final Plat for the Phase in the real property records of the County; (5) The Redeveloper has obtained the City's approval of the Master Grading Plan for the Phase (or an approved portion thereof); and (6) The Redeveloper has obtained the City's and any other required governmental authority's approval required of the Master Drainage Plan for the Phase (or an approved portion thereof). (b) Notwithstanding the foregoing, the Redeveloper may perform the following activities within a Phase prior to approval of the Final Plat: (1) Grading in accordance with the approved Master Grading Plan for the Phase, (2) Street construction in accordance with City-approved plans, and (3) Installation of water, sanitary sewer, storm water and drainage facilities in accordance with the approved Master Drainage Plan for the Phase. Section 3.2. Subdivision and Land Use Approvals. It is contemplated that the City and the Redeveloper will enter into separate agreements with respect to the following: (a) Special Assessments. At the Redeveloper's request, the Redeveloper has agreed to approximately $700,000 of special assessments against the commercial property to fund Public Improvements, not including any special assessments levied for City Parking Ramp Bonds. If the City determines that certain of the Public Improvements will benefit both property within the Project and other property, it is contemplated that the City Council will, in accordance with normal City policies, assess the other benefited properties for their appropriate share of the costs to reflect the benefit to such 10 other property resulting from gueh imgro ementg; 9rov/ded, that any sl3ecial assessments for City Parking Ramp Bonds shall only be assessed against benefited properties within the Project. (b) Homeowners' Associations and Restrictive Covenants. The Redeveloper may utilize deed restrictions, covenants, agreements, architectural controls, homeowners' associations and other means to control the use and to ensure the maintenance of the land within the Project. The Redeveloper shall submit any such instruments to the City and Authority for their review and comment. The parties acknowledge that the Minnesota Pollution Control Agency may impose deed or other land use restrictions. (c) Zoning and Land Use Approvals. Nothing in this Agreement shall limit the authority of the City with respect to zoning and land use approvals. Notwithstanding the foregoing, the staff of the Authority shall cooperate with the Redeveloper and assist the Redeveloper in the processing and obtaining of zoning and land use approvals. The Redeveloper shall be responsible for applying for and obtaining all land use and zoning approvals necessary for the Project. (d) Building and Construction Permits. Nothing in this Agreement is intended to limit the governmental authority of the City with respect to its building and construction permitting process for the Minimum Improvements. The Redeveloper shall comPly with all applicable City building codes and construction requirements and shall be responsible for obtaining all building permits prior to construction. (e) Redeveloper Site Improvements - Mass Grading and Storm Water Management. The Redeveloper will mass grade the Redevelopment Property and will construct a storm water management system and suitable storm water ponds in accordance with the Master Grading Plan and Master Drainage Plan approved by the City and the Stormwater Best Management Practices Funding Agreement with the Minnehaha Creek Watershed District (the "MCWD Funding Agreement"). Subject to Unavoidable Delays, the Redeveloper must commence and complete each portion of the mass grading and each portion of the construction of the storm water management system on or before the commencement and completion dates established for such work in such approved Plans and MCWD Funding Agreement. The grading and storm water management work for a Phase may be performed in stages if not otherwise prohibited by such Plans and MCWD Funding Agreement. The Redeveloper may not commence the first portion of the mass grading and storm water management system construction or any subsequent portion of the mass grading or storm water management system construction until: (1) unless waived by the City, the Redeveloper has delivered to the City a cash deposit, certified check, performance bond or other security reasonably satisfactory to the City consistent with City ordinance. (2) the Redeveloper has paid to the City the inspection fees established under the City Zoning Ordinance with respect to the work to be performed as a part of that Phase, and the Redeveloper has provided the City with evidence that the Redeveloper has obtained all approvals required from the Minnehaha Creek Watershed District or other governmental authority before performing such work. (f) Street Vacations within the Redevelopment Property. It is contemplated that the County will relocate portions of County Road 15 in accordance with applicable City ordinances and Minnesota statutes. Once the new portion of County Road 15 is open for travel, the old portion will be closed to traffic, and the City and/or County are anticipated to take the steps necessary to vacate the street and convey any interest they may have in the land underlying the vacated street to the Authority for 11 reconveyance to the Redeveloper to be incorporated in the development of the relevant Phases. The Redeveloper or the Authority shall apply for any such actions in accordance with such ordinances and statutes. The Redeveloper shall pay any fees imposed by the City or County to process such vacations. Section 3.3. Additional City Actions. (a) It is the understanding of the parties that the City intends to take the following actions to facilitate the project: (1) Take any actions required of the City to create the Tax Increment District. (2) Convey the City-owned parcels within the Redevelopment Property to the Authority prior to conveyance to the Redeveloper. (3) Agree that sewer accessibility charge (SAC) credits relating to buildings within the Redevelopment Property which have been or will be demolished will be credited to the Project and shall not be allocated outside the Project, unless such credits are not needed for the Project. (4) Agree that there shall be no increases in the City fees listed on Exhibit N for the Redevelopment Property through 12/31/07, and thereafter increases shall be limited to 10% annually until all construction anticipated under this Agreement has been completed. (5) Approve the park dedication fee set forth in Section 6.3(c). (6) Waive water and sewer mink fees. (7) Levy the special assessments described in Section 3.2(a). (8) Issue the City Bonds (provided that the conditions set forth herein for their issuance have been met) and, in the case of the City Cleanup Bonds, execute agreements pledging its full faith and credit for their repayment. (9) Make and pursue an application for thirty seven (37) dock and dredging permits from the appropriate governmental agencies. (10) Give preference to the Project with respect to $750,000 of any Metropolitan Council Livable Community grants awarded to the City. Subject to the terms of any written agreement between the Metropolitan Council and the City relating to the use of such grant proceeds, the Redeveloper will make grant funds received in excess of $750,000 available to the City for use in constructing the Park & Ride parking ramp, provided that such funds are not needed for the Feasibility of Auditors Road. (11) Assist the Redeveloper in obtaining the funding for innovative stormwater management contemplated by the MCWD Funding Agreement. 12 ARTICLE IV ACQUISITION AND CONVEYANCE OF THE REDEVELOPMENT PROPERTY Section 4.1. Statement of Intent. It is the intention of the parties that the Redevelopment Property not already owned by the City or the Authority is to be acquired through a combination of direct acquisitions by the Redeveloper and acquisitions by the Authority followed by conveyances to the Redeveloper. Whenever possible, direct acquisition by the Redeveloper is preferred. In the acquisition of the Redevelopment Property and related activities, the obligation of both the Authority and the Redeveloper shall only be to proceed in good faith and to utilize best efforts. Section 4.2. Acquisition. (a) The Redeveloper agrees to diligently pursue acquisition activities with respect to the parcels in a Phase within a timeframe that the Redeveloper deems satisfactory to allow for timely commencement of construction as provided in Section 6.7. Acquisition activities include, to the extent required by law, enforceable agreements with owners and tenants regarding the payment of relocation benefits. The parties may agree that the Redeveloper need not acquire a parcel if, due to cost, delay or other factors the Phase can proceed without that parcel. The Redeveloper agrees to indemnify and save harmless the Authority and the City, their officers, agents and employees, and to defend the same, from any claims for relocation benefits and any appeals of relocation benefits relating to parcels acquired or sought to be acquired by the Redeveloper within the Redevelopment Property. (b) The parties may agree that commencement of construction of a Phase may begin prior to acquisition of all the parcels in that Phase. Section 4.3. Request to Condemn; Authori _ty Decision. If the Redeveloper is unable to acquire all of the parcels within a Phase in a timeframe that is, in the Redeveloper's reasonable discretion, satisfactory to allow for the commencement of construction as provided in Section 6.7, then the Redeveloper may request the Authority to acquire such parcels by eminent domain. The Authority will authorize the acquisition by eminent domain and will in good faith undertake the steps necessary to acquire fee simple title to the portions of the Redevelopment Property to which the request relates (and, if requested, will proceed in accordance with Minnesota Statutes Section 117.042, the "quick take" provision) if, in its sole discretion, it determines that (i) the Redeveloper has made reasonable efforts to acquire the property, (ii) the Redeveloper has offered what appears to be a fair price for the property, (iii) the Redeveloper has agreed to provide the security set forth in Section 4.4 to cover acquisition and relocation costs, (iv) the conditions set forth in Section 4.5 have been met, and (v) the Authority determines that the requested acquisition will primarily serve a public purpose. Section 4.4. Security and Payment. (a) As security for Redeveloper's obligations to cover acquisition and relocation costs of Authority Parcels acquired by eminent domain, the Redeveloper shall deposit the following amounts with the Authority: (1) As a precondition to the Authority's obligation to undertake eminent domain proceedings, an initial deposit of ten percent (10%) of the Authority's estimate of the total acquisition 13 costs for the parcel, which shall include an estimate of market value and relocation benefits and assistance, attorney's fees and all other professional fees and services. (2) At least 10 days in advance of the due date for any damage award, any relocation benefit payment or any deposit required to be made into court in connection with the acquisition by condemnation (subject to the Redeveloper's right to elect not to proceed, as set forth in Section 4.7), the Redeveloper shall deposit an amount equal to one hundred percent (100%) of such award, payment or deposit, less the Redeveloper's initial deposit. (b) Transfer of the acquired parcel to the Redeveloper will be scheduled promptly after acquisition of the parcel by the Authority, but not sooner than the end of the time to appeal the condemnation or relocation benefit award. At the closing, the Redeveloper either shall pay the condemnation costs and relocation costs, if any, incurred beyond the sums previously deposited by the Redeveloper or shall receive a refund if the final total acquisition costs are less than the Redeveloper's deposits. (c) If the amount of the award or relocation payment is appealed, the Redeveloper shall advance, at closing, one hundred ten percent (110%) of the amount of the Respondent's claim plus the City's estimated costs of defending the appeal, less the amount of deposits made by the Redeveloper. Section 4.5. Additional Conditions to Authority Obligation. The obligation of the Authority to make the deposit and obtain title to and possession of any of the parcels that make up the Redevelopment Property is, unless waived in writing by the Authority, also subject to the following: (a) The Redeveloper is not in default of any provisions of this Agreement and all amounts due and payable as provided above in this Article have been paid. (b) The Redeveloper has reviewed the condition of title as such is to be acquired by the Authority and notified the Authority in writing that such condition of title is satisfactory or will be satisfactory upon the conclusion of eminent domain proceedings. At the same time the Redeveloper will have also reviewed the condition of title to all parcels owned by the Authority or the City and has agreed to accept the same based on such condition of title. , (c) The Redeveloper has provided the Authority with an undertaking in the form of a written agreement, and with security all reasonably acceptable to the Authority which will assure payment by the Redeveloper of the security and payments set forth in Section 4.4. (d) The Redeveloper has furnished the Authority with written notice, reasonably acceptable to the Authority, indicating that, based upon Redeveloper's own investigation and the completed and approved AUAR, Redeveloper is satisfied in all respects with the nature and condition of such parcels and accepts the same AS IS and WHERE IS. (e) The Authority is satisfied that, except in the case of a request to acquire a parcel or parcels by condemnation, the City, the Authority, or the Redeveloper or its assignee and/or designee, has obtained, or will be obtaining, fee simple title to any portions of the Redevelopment Property which are not the subject of the condemnation. 14 (f) The Redeveloper has furnished the Authority with written evidence reasonably acceptable to the Authority that it has funds, whether in the nature of equity or financial commitment or otherwise, which are sufficient for construction of the Minimum Improvements for the applicable Phase. (g) If the Redeveloper has not yet begun construction of the applicable Phase, the Redeveloper has supplied the Authority with a signed written statement reasonably satisfactory to the Authority to the effect that, to the best of Redeveloper's knowledge, upon Closing (or Closings if the Authority has been requested to acquire more than one parcel by eminent domain), there will be no remaining matters which would affect the prompt Commencement of Construction of the Minimum Improvements for the applicable Phase in accordance with the schedule for Commencement and Completion of Construction described in Section 6.7. The statement must also acknowledge that the Redeveloper understands that the Authority is relying on the statement as an inducement to acquire and convey the Redevelopment Property. (h) The Authority has reviewed and approved the Concept Plan. (i) The Tax Increment District has been approved and a request for certification has been made to the County Auditor. Section 4.6. Consultation with the Redeveloper. In view of the fact that the Authority will be requiring that the Redeveloper pay for all of the costs of acquisition, the parties agree as follows: (a) The Authority will not institute any condemnation action without the prior written assent or request of the Redeveloper (unless the Authority institutes a condemnation action for its own purposes and not pursuant to a Redeveloper request under Section 4.3). (b) The Authority agrees that it will update the Redeveloper or its legal representative from time to time as to the status of any condemnation action, that it will consult with the Redeveloper regarding significant matters of strategy, and that it will obtain the Redeveloper's prior consent before making or agreeing to make any material stipulation, concession or settlement. (c) The Redeveloper agrees to treat material furnished it by the Authority in all such updates, consultations and discussions regarding consent as private within the meaning of Minnesota Statutes, Chapter 13. Section 4.7. Discontinuation. (a) The Authority shall discontinue acquisition by condemnation of a parcel of the Redevelopment Property if the parties agree prior to the date that title and possession have passed to the Authority that, due to cost, delay or other factors, the relevant Phase can proceed without that parcel. (b) The Authority may discontinue acquisition by condemnation of the requested portions of the Redevelopment Property at any time prior to the date that title and possession have passed to the Authority in the event that any of the following occur: (1) The Redeveloper is in default of any of its obligations under this Agreement or the agreement contemplated in Section 4.3. It is understood that no notice or cure periods are applicable to this Article except as specifically stated herein. 15 (2) The Redeveloper fails to make any payment or deposit with respect to the acquisition of portions of the Redevelopment Property or the payment of relocation benefits therefor. (3) The Authority determines in the exercise of its reasonable judgment that the Redeveloper's obligation to pay for the acquisition of the Redevelopment Property or to pay relocation benefits is not adequately secured, and the Redeveloper fails, with 30 days of a written request by the Authority to provide security deemed adequate by the Authority. (4) The Redeveloper determines in its sole discretion that, due to material adverse market or economic conditions, material adverse soil or environmental conditions, title problems, the inability to acquire all or any portion of the Redevelopment Property, or inability to obtain any governmental licenses or approvals necessary for the effective development of the Redevelopment Property (including, without limitation, vacation of streets lying within the boundaries of the Redevelopment Property), following prompt and diligent efforts to obtain the same, proceeding with the Project on the Redevelopment Property is not Feasible or, because of the uncertainty as to timing or otherwise, Feasibility cannot be determined. (5) Actions by governmental entities have, in the reasonable judgment of the Authority and the Redeveloper, placed material physical limitations on the capacity of the Redevelopment Property to be developed as contemplated. (6) In the case of a proceeding pursuant to Minnesota Statutes Section 117.042, the Redeveloper fails to make any payment to the Authority to cover a court deposit of the type and within the time period described in Section 4.4. The Authority may, upon becoming aware of the reasons stated above and verifying the same with the Redeveloper, and upon thirty (30) days' advance written notice to the Redeveloper and the Redeveloper's failure to correct or resolve the reasons giving rise to the Authority's desire to discontinue its acquisition activities within such thirty (30)-day period, discontinue its acquisition activities. (c) Upon discontinuance by the Authority of acquisition activities pursuant to either of subparagraphs (a) or (b) above, the Redeveloper's sole obligation shall be to.reimburse the Authority as set forth in Section 7.2(c)(2) and to indemnify and save harmless the Authority and the City, their officers, agents and employees and to defend the same from (i) any claim or cause arising out of or occasioned by the discontinuance of such acquisition activities, (ii) any claims for relocation benefits relating to parcels within the Redevelopment Property, whether or not condemnation of such parcels was commenced, (iii) any appeals for condemnation awards or relocation benefits (whether or not such appeals have been commenced at the time of discontinuance), and the Authority's sole remedy shall be to obtain such reimbursement and indemnity from the Redeveloper. Section 4.8. Conveyance of the Authority Parcels to the Redeveloper. (a) Title. The Authority shall convey title to and possession of the Authority Parcels in each Phase to the Redeveloper under a quit claim deed in the form of the Redevelopment Property Deed contained in Exhibit L. Title to the Authority Parcels shall be conveyed in the condition of title approved by the Redeveloper pursuant to Section 4.5(b). The conveyance of title to the Redevelopment Property pursuant to the Redevelopment Property Deed shall be subject to all of the conditions, covenants, restrictions and limitations imposed by this Agreement and the Redevelopment Property Deed. At its expense the Redeveloper shall obtain any title insurance it deems necessary. 16 If the title to any Authority Parcel does not conform to the condition of acceptance pursuant to Section 4.5(b) and cannot be restored to such condition by the Authority within 60 days of notice of non- conformity, the Redeveloper may either: (1) Terminate this Agreement; or (2) Elect to accept the title in its non-conforming condition by giving written notice to the Authority, in which event the Redeveloper shall hold back adequate funds from the purchase price for such Authority Parcel to cure the defects and apply such holdback funds to the cost of curing such defects, including attorneys' fees, and pay the unexpended balance to the Authority. If such amount exceeds the purchase price, the Authority shall promptly remit the excess to the Redeveloper. If the amount of such holdback cannot be mutually agreed to by the Authority and the Redeveloper, the Redeveloper's title insurer shall determine the amount of such holdback. (b) Time of Conveyance. Except for Authority Parcels acquired by eminent domain (as to which Parcels the time of conveyance is set forth in Section 4.4(b)) and subject to Unavoidable Delays, unless extended by the mutual agreement of the parties the Authority shall execute and deliver to the Redeveloper a Redevelopment Property Deed for the Authority Parcels in each Phase no less than sixty (60) days before Commencement of Construction for such Phase. (c) Price and Payment. The Closing or Closings with respect to each Phase and payment of the purchase price for the Authority Parcels conveyed in such Closings shall take place at the principal offices of the Authority. At each Closing, the Authority agrees to sell and the Redeveloper agrees to purchase the Authority Parcels being conveyed for the purchase prices set forth below: (1) The purchase price for each Authority Parcel which is owned by the City or the Authority on the date hereof (other than the Custer and Metro Transit Parcels) shall be One Dollar ($1.00); (2) The purchase price for each Authority Parcel acquired by eminent domain pursuant to Sections 4.3 through 4.6 shall be the sum of all the amounts paid or deposited by the Redeveloper in connection with the acquisition of such parcel pursuant to said Sections; and (3) The purchase price for the Custer and Metro Transit Parcels shall be the cost to the Authority of acquiring those Parcels, together with simple interest at the rate of seven and one-half percent (7.5%) per annum, and shall be payable at the Closing for Auditors Road when the conveyance of those parcels is made to the Redeveloper. (d) Survey and Title Evidence. With respect to each Authority Parcel (other than Authority Parcels acquired by the Authority through eminent domain after the date hereof), the Authority agrees to provide the Redeveloper with any ALTA survey in the Authority's possession (a "Survey") which complies with the "Minimum Standard Detail Requirements and Classifications for ALTA/ACSM Land Title Surveys" (1999) including items 1 through 4, 6 through 11 and 13 of Table A thereof; and all title commitments, title insurance policies, registered property abstracts, and other title material that the Authority has in its possession. (e) Inspection. With respect to parcels owned by either the Authority or the City, and with respect to parcels under condenmation when the Authority has obtained a court order permitting inspection, the Redeveloper, its agents and designees, are granted permission to inspect, analyze, and test the Redevelopment Property, at Redeveloper's sole cost and expense. The Redeveloper shall hold the 17 Authority harmless from any liability resulting solely from the entering upon the Redevelopment Property or the performing of any of the tests or inspections referred to in this subparagraph by the Redeveloper, its agents or designees. (f) Taxes. Real estate taxes due and payable prior to the year of Closing and any penalties and interest and installments of special assessments due and payable therewith shall be paid by the Authority, unless the payment of such taxes is required by condemnation, in which case the payment of such taxes will be the responsibility of the Redeveloper. Otherwise, real estate taxes due and payable in the year of Closing and installments of special assessments due therewith shall be allocated between the parties based on their respective period of ownership in the year of closing. Real estate taxes and installments of special assessments due and payable in the years subsequent to the Closing shall be paid by the Redeveloper. (g) Plat. The Redeveloper at its expense shall record the Final Plat for each Phase. Except as the parties may agree otherwise or as provided in Section 3. l(b), the Final Plat shall be recorded before Commencement of Construction. Section 4.9. Conditions Precedent to Conveyance. (a) The Authority's obligation to convey the Authority Parcels in each Phase to the Redeveloper shall be subject to the following conditions: (1) The Authority shall have acquired title to the Authority Parcels; (2) On the date of Closing, the Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement; (3) There shall have been no material adverse change in the Redeveloper's financial commitment and ability to finance construction of the Minimum Improvements; (4) The Redeveloper shall have paid the purchase price described in Section 4.8(c); and (5) The Tax Increment District shall have been established and a request for certification made to the County Auditor. (b) The Redeveloper's obligation to acquire the Authority Parcels in each Phase shall be subject to the'following conditions: (1) The Authority shall have approved the Concept Plan for such Phase; (2) Redeveloper; and The City shall have approved the Preliminary Plat following its submission by the (3) The City shall have completed the dump remediation pursuant to Section 4.10. (c) In the event the condihons precedent for either Party cannot be satisfied by the Date of Closing, then this Agreement shall terminate. 18 ~ectlon 4.10. Bump I~emecllatlon: Conveyance of Lost ka!~e ~uthoritv Parcel to Reclevelol~er. (a) Background. A dump is located on a portion of the Lost Lake Authority Parcel. Based upon information provided by the Redeveloper, the Authority has concluded that Lost Lake cannot be developed in the manner contemplated by the parties unless certain remediation actions are taken with respect to the dump prior to the conveyance of the Lost Lake Redevelopment Property to the Redeveloper. Additionally, the Redeveloper is unwilling to accept conveyance of the Lost Lake Authority Parcel and to undertake the contemplated redevelopment of Lost Lake unless and until such remediation actions have been taken with respect to the dump by the Authority. (b) Mitigation Plan. Promptly upon execution of this Agreement, the Authority will retain the services of a consulting firm acceptable to the Redeveloper (the "Environmental Consultant") to conduct the necessary inspections and site surveys and otherwise assist the Authority in preparing the following: (1) A mitigation plan calling for the removal from the site of all dump material except for inert material that can be retained on-site and used as fill, and also compaction of fill material (for all portions of the dump except for that part underlying the 17 lakefront townhomes, which will be constructed on piers). (2) Plans and specifications for the work necessary to accomplish the mitigation plan and an estimate of the cost of such work including, without limitation, all costs associated with placing material at a qualifying off-site location. The Environmental Consultant's estimate must also include an itemization of the nature of the work expected to be completed at the time the first $1,000,000 of the contract price has been expended for the purposes of the project review described in subparagraph (e)(3) below. (3) A Development Response Action Plan ("DRAP") to be submitted to the MPCA for approval and any other reports or submittals required prior to commencement of the work. (4) Application to the MPCA and any other agency having jurisdiction over the work for approval of the DRAP, any permits, licenses or approvals necessary to carry out the work and, upon completion of the work, to use the site for its intended purposes as set forth in the Concept Plan. If the Environmental Consultant's cost estimate to carry out the mitigation plan exceeds $3,500,000, the Authority may terminate this Agreement unless the Authority and the Redeveloper reach agreement regarding payment of such additional cost. (c) Remediation. Subject to the provisions of paragraph (d) below, and the Authority's right to terminate the mitigation work as described in subparagraphs (b) and (e)(3) of this Section, the Authority is willing to expend an amount for dump remediation equal to the lesser of: (i) $3,500,000 or (ii) the actual cost of accomplishing the mitigation plan for the dump. (d) Redeveloper's Obligations. The Redeveloper agrees to the following, and agrees that the performance of each of these obligations is a precondition to the Authority's obligation to undertake and complete the dump remediation (the obligations in clauses (2), (3), (4) and (6) shall be preconditions to the Authority's bidding of the remediation work, and the obligations in clauses (7), (8) and (9) shall be preconditions to the aWard of the contract): 19 (1) Within thirty (30) days of receipt of an invoice therefor from the Environmental Consultant, the Redeveloper will pay for the cost of the inspections, site surveys and the other matters described in paragraph (b) above that are recommended by the Environmental Consultant in order to determine the extent and cost of work necessary to remediate the dump and to obtain all necessary permits, licenses and approvals. (2) It will not unreasonably withhold its approval of the mitigation plan proposed by the Environmental Consultant. (3) It will agree to accept conveyance of the Lost Lake Authority Parcel upon (i) [receipt of a certification by the Environmental Consultant that the Parcel, as remediated, is suitable for residential use], (ii) receipt from the MPCA of a No Further Action Letter, a No Association Determination Letter and a Certificate of Completion, (iii) the Redeveloper's project and mortgage lenders shall have approved such MPCA assurances, and (iv) satisfaction of the other conditions of the Redeveloper's obligations set forth in Sections 4.8 and 4.9. (4) It will certify to the Authority that it is aware of no fact or circumstance which would prevent the prompt Commencement of Construction of the Phase I Minimum Improvements following conveyance of the Lost Lake Authority Parcel to the Redeveloper (including satisfaction of all of the conditions required by this Agreement for such conveyance) upon completion of the mitigation plan. (5) Not less than seven (7) days before the Authority is expected to award the contract (but not more than fifteen (15) days before work is commenced), the Redeveloper will certify to the Authority that Phase I is Feasible and that it agrees to be bound by such certification of Feasibility as long as the dump remediation is completed within ninety (90) days of such certification. The items from the MPCA referred to in clause (3) need not have been delivered by the expiration of the ninety (90)-day period. (6) It will provide the Authority with all necessary easements, licenses or rights of entry to adjacent lands under the control of the Redeveloper necessary to perform the mitigation plan. (7) It will certify to the Authority that it intends to proceed with Phase II if it is Feasible and is not aware of any facts which would render Phase II not Feasible. (8) It will provide the Letter of Credit to the Authority as more fully set forth in Section 8.2. (9) forth in Section 8.3. It will execute the Maxwell Mortgage in favor of the Authority as more fully set (e) Completion of Dump Remediation; Termination. (1) Bidding. It is anticipated that as soon as the Environmental Consultant has prepared the plans and specifications for the work under the mitigation plan, and all necessary permits, licenses or approvals have been obtained from appropriate agencies, the Authority will bid the work in the manner required by law. If the Authority receives a responsible bid in an amount not greater than the Environmental Consultant's estimate, and upon being satisfied that all of the above conditions have been satisfied or waived, the Authority will award the contract to the lowest responsible bidder. If all the responsible bids are above the Environmental Consultant's estimate, the Authority shall have no 20 o%li ation to award the contract 13aaed ul 0n uch higher hid unless the Authority and the Redeveloper reach agreement regarding payment of such additional cost, it being understood that neither party is obligated, by this provision, to agree to pay all or part of such increased cost. (2) Commencement Date. The parties agree to utilize their best efforts so that the work can be bid not later than June 1, 2005, with the work to be commenced not later than July 1, 2005 and completed not later than September 1, 2005. (3) Coordination with Soil Corrections. The Authority will cause the Environmental Consultant to coordinate its work, to the extent possible, with the soil corrections to be performed by the Redeveloper. (4) Termination and Release. The contract for the mitigation work will contain a provision permitting the Authority to terminate the contract upon the completion of the first $1,000,000 of work. The Authority may exercise such right if: (i) the amount of work performed for the first $1,000,000 is less than the amount projected to have been completed in the Environmental Consultant's estimate, or (ii) based upon information known at that time, the cost of completing the work is likely to exceed the Environmental Consultant's estimate for such remaining work and the Authority and Redeveloper are unable to agree on how to pay for such increased cost. (5) Effect of Termination Pursuant to this Section. Upon termination of this Agreement pursuant to either of subparagraphs (b) or (e)(3) above, this Agreement shall be terminated (including the Tax Deficiency Guarantee), the Letter of Credit and Maxwell Mortgage shall be released, and the Authority and the Redeveloper will be released from their obligations hereunder and thereunder, except as to any amounts due and owing from either party to the other as of the date of such termination. 21 ARTICLE V FINANCING; TAX INCREMENT AND OTHER PUBLIC ASSISTANCE Section 5.1. Creation of Tax Increment District, Certification. In accordance with the requirements of the Act, the Authority will utilize its best efforts and proceed in good faith to take the necessary actions to adopt and approve the Tax Increment District as a "redevelopment district" and to adopt the Tax Increment Plan for the Tax Increment District. Based on these activities, the Authority or the City will establish the Tax Increment District and request its certification promptly after its creation. The Authority or the City may elect at any time to create a "hazardous substance subdistrict" within the Tax Increment District in accordance with the requirements of the Tax Increment Act. Section 5.2. Tax Increment Financing. The Authority will provide to the Redeveloper an amount of tax increment financing assistance not to exceed the Eligible Project Costs incurred by the Redeveloper. This tax increment financing assistance will be payable to the Redeveloper by the Authority as provided in this Article. Section 5.3. City_ Bonds. (a) City Cleanup Bonds. The City is expected to issue one or more series of City Cleanup Bonds in an amount to yield net proceeds equal to the amount set forth in Section 4.10(c) to finance the dump remediation to be undertaken by the Authority with respect to the Lost Lake Authority Parcel. The City shall not require personal guarantees from the principals of the Redeveloper for the City Cleanup Bonds. The Authority will pledge Tax Increment to the repayment of the principal of and interest on the City Cleanup Bonds upon such terms and conditions as are deemed appropriate by the City and the Authority. (b) City P! Bonds. At the Redeveloper's request and as approved by the City and allowed by law, which request may be made at any time after the City has approved the plans for the Public Improvements, the City will issue one or more series of City PI Bonds for Public Improvements which qualify as Eligible Project Costs. No City PI Bonds will be issued for Phase I Public Improvements. The City shall not require personal guarantees from the principals of the Redeveloper for the City PI Bonds. The Authority will pledge Tax Increment and special assessments to the repayment of the principal of and interest on the City PI Bonds upon such terms and conditions as are deemed appropriate by the City and the Authority. (c) City Parking Ramp Bonds. At the Redeveloper's request and as approved by the City and allowed by law, which request may be made at any time after the City has issued a building permit for the Parking Ramp, the City will issue City Parking Ramp Bonds for that portion of the cost of the Parking Ramp not covered by the Metropolitan Council grant referred to in Section 3.3(a)(10). Not less than 100% of the amount of the City Parking Ramp Bonds shall be levied as special assessments on benefited property in the City. The City shall not require personal guarantees from the principals of the Redeveloper for the City Parking Ramp Bonds. The Authority will pledge Tax Increment to the repayment of the principal of and interest on the City Parking Ramp Bonds upon such terms and conditions as are deemed appropriate by the City and the Authority. The City agrees to reimburse the Redeveloper for special assessments paid by the Redeveloper with respect to the Parking Ramp financed with the City Parking Ramp Bonds from Tax Increment; provided, however, that the pledge and application of such Tax Increment to the reimbursement for the payment of such special assessments 22 shall 'be granted such prlor{ty of payment as t~e City, ~n ~ts sole (~Cl:etiol'l, ~19~ ~el'I~{l'le ~1'1(~, ~I~ ;ll'i~ event, shall be subordinate to the priority granted under subparagraphs (a)-(e) of Section 5.8. Section 5.4. Authori _ty Bonds. (a) Taxable TI Bonds. At the Redeveloper's request, the Authority agrees to issue one or more series of Taxable TI Bonds on such terms and conditions as are then available in the public marketplace, but only in the amount required to pay actual or projected Eligible Project Costs which have not been, and are not expected to be, reimbursed or paid with grants, land sales proceeds, or the proceeds of City Bonds. The Redeveloper acknowledges that the Taxable TI Bonds will be revenue bonds and will not constitute general obligations of either the City or the Authority. The Redeveloper further acknowledges that the issuance of Taxable TI Bonds before the second quarter of any year with respect to Minimum Improvements completed by December 31 of the prior year will likely require security in the form of a bank letter of credit, personal guarantees from the Redeveloper, or personal guarantees from the principals of the Redeveloper. (b) Tax Exempt TIBonds. At the Redeveloper's request, the Authority agrees to issue one or more series of Tax Exempt TI Bonds in the second quarter of each year with respect to Minimum Improvements in any Phase completed by December 31 of the prior year, on such terms and conditions as are then available in the public marketplace, but only in the event that the Authority receives a preliminary opinion from Bond Counsel that, upon the issuance of such obligations, interest on such Tax Exempt TI Bonds will not be includable in gross income for federal income tax purposes. The Redeveloper acknowledges that the Tax Exempt TI Bonds will be revenue bonds and will not constitute general obligations of either the City or the Authority. The Authority shall determine the amount of Tax Increment that is projected to be available to pay the principal of and interest on such Tax Exempt TI Bonds after payment of any City Bonds. The aggregate principal amount of Tax Exempt TI Bonds shall not exceed the amount that can reasonably be paid from such projected Tax Increment. Such Bonds will be issued in an amount to yield net proceeds sufficient, subject to projected Tax Increment, to (i) refund and replace previously issued Taxable TI Bonds and (ii) pay actual or projected Eligible Project Costs which have not been, and are not expected to be, reimbursed or paid with proceeds of Taxable TI Bonds, grants, land sales proceeds, or the proceeds of City Bonds. The parties acknowledge that the amount of Tax Exempt TI Bonds which the Authority is able to issue may not be sufficient to pay the total amount contemplated by clauses (i) and (ii) of the preceding sentence. Section 5.5. Conditions to Issuance of Authority Bonds. (a) Issuance of Taxable TI Bonds. The Authority will issue Taxable TI Bonds pursuant to Section 5.4(a) upon satisfaction of the following conditions: (1) The Redeveloper has elected to proceed with Phase II or Phase III, as applicable, pursuant to Section 7.1; (2) The Redeveloper has delivered to the Authority a sworn construction cost statement showing the Eligible Project Costs of the applicable Minimum Improvements; (3) The Redeveloper has closed on a Construction Loan for such Minimum Improvements in an amount sufficient, together with other funds available, to finance the Project Costs; and 23 (4) The Authority has approved the Concept Plan. (b) Issuance of Tax Exempt TI Bonds. The Authority will issue Tax Exempt TI Bonds pursuant to Section 5.4(b) upon satisfaction of: (1) The conditions listed in subparagraph (a) above, and (2) The Authority has issued a Certificate of Completion for all of the Phase I Minimum Improvements. (c) Timing of Issuance of Tax Exempt TI Bonds. Notwithstanding the foregoing, the Authority shall have the option to delay issuance of Tax Exempt TI Bonds for as long as any of the following conditions exist: (1) Based upon a written opinion of Bond Counsel, the Authority is prohibited from issuing Tax Exempt TI Bonds pursuant to changes in federal law enacted after the date of this Agreement; or (2) Based upon a written opinion of the Underwriter, substantial adverse changes in market conditions have occurred that make it infeasible to refinance the Taxable TI Bonds on a reasonable basis; or (3) Based upon a written opinion of Bond Counsel, delay is necessary to ensure that the Authority and the City will not issue more than $10,000,000 of"qualified tax-exempt obligations" (as defined in Section 265(b)(3) of the Code and applicable Regulations) in the year in which the Tax Exempt TI Bonds are proposed to be issued. The Authority and City will use their best efforts and will consult with the Redeveloper regarding timing of issuance of bonds to avoid application of this provision. (d) Redeveloper Responsibility Upon Refinancing. If, following a request from the Redeveloper to issue Tax Exempt TI Bonds, the Authority determines that the net proceeds of Tax Exempt TI Bonds would be insufficient to refund and replace all outstanding Taxable TI Bonds, and unless the Authority obtains a written opinion of Bond Counsel that a partial refunding of the Taxable TI Bonds would not impair the tax-exempt status of the Tax Exempt TI Bonds, the Redeveloper shall either: (1) Upon issuance of the Tax Exempt TI Bonds, cause the holders of the Taxable TI Bonds to return the Taxable TI Bonds (by purchasing them from the holders thereof or otherwise) to the Authority, along with an unconditional release from such holders which terminates the Authority's obligations with respect to the unpaid principal of and accrued interest on the Taxable TI Bonds, or (2) Provide written assurances acceptable to the Authority that the Redeveloper will deliver to the Authority on or before the date of issuance of the Tax Exempt TI Bonds an amount which, along with the net proceeds of the Tax Exempt TI Bonds, will be sufficient to call the Taxable TI Bonds (the "Cash Requirement"); and deliver the Cash Requirement in immediately available funds to the Authority no later than fifteen (15) days prior to the issuance of the Tax Exempt TI Bonds (the Redeveloper shall be reimbursed the Cash Requirement by means of a Gap Tax Increment Note pursuant to Section 5.6(b)), or (3) Take such other actions as may be agreed upon by the Authority and the Redeveloper with respect to the Taxable TI Bonds and the Tax Exempt TI Bonds. 24 (e) Redeveloper Representations. The Redeveloper agrees that, with respect to the Tax Exempt Obligations, it will take no action which would in the opinion of Bond Counsel: (1) Cause any Tax Exempt Obligations to be determined to be "private activity bonds" (as such term is defined in Section 141 of the Code and applicable Regulations), or (2) Cause any Tax Exempt Obligations to be determined to be "arbitrage bonds"(as such term is defined in Section 148 of the Code and in applicable Regulations), or (3) Cause interest on any Tax Exempt Obligations to be includable in gross income for federal income tax purposes. Section 5.6. Tax Increment Notes. (a) Short_fall Tax Increment Notes. Upon the completion of each Phase, the Authority shall issue and deliver to any of the Redeveloper, the City or the Authority (in lieu of the latter, the Authority may elect to use an interfund loan) a Shortfall Tax Increment Note in substantially the form attached hereto as Exhibit D for Eligible Project Costs in the amount of any shortfall paid by any of those entities to make a Phase Feasible pursuant to Section 7.1. Interest will accrue on the Shortfall Tax Increment Notes from the date of actual payment by the holder of the Eligible Project Costs comprising the shortfall at a rate per annum equal to the yield of equivalent maturity Treasury bonds plus three percent (3%). All Shortfall Tax Increment Notes shall be issued pari passu. (b) Gap Tax Increment Notes. Upon the completion of each Phase, the Authority shall issue and deliver to the Redeveloper a Gap Tax Increment Note in substantially the form attached hereto as Exhibit D if and to the extent that the Eligible Project Costs paid by the Redeveloper with respect to that Phase are unreimbursed by proceeds of City Bonds, Authority Bonds, grants, land sales proceeds or Shortfall Tax Increment Notes. Interest will accrue on the Gap Tax Increment Notes from the date of actual payment by the Redeveloper of the Eligible Project Costs at a rate per annum equal to the yield of equivalent maturity Treasury bonds plus three percent (3%). All Gap Tax Increment Notes shall be issued pari passu. (c) De_ferred Tax Increment Notes. Upon the issuance of the Certificate of Completion for the last Building in Phase I1/, the Authority shall issue and deliver to the Redeveloper a Deferred Tax Increment Note in substantially the form attached hereto as Exhibit D, if and to the extent that the Eligible Project Costs paid by the Redeveloper with respect to that Phase are unreimbursed by proceeds of City Bonds, Authority Bonds, grants, land sales proceeds, Shortfall Tax Increment Notes or Gap Tax Increment Notes, provided that a Deferred Tax Increment Note shall be issued to the Authority (or, at the Authority's election, an interfund loan) in an equal principal amount for unreimbursed Eligible Project Costs advanced by the Authority. Interest will accrue on the Deferred Tax Increment Notes from the date of issuance of the Notes at the rate of nine percent (9%) per annum. All Deferred Tax Increment Notes shall be issued pari passu. (d) Provisions Applicable to all Tax Increment Notes. (1) Interest on each Tax Increment Note shall be computed on the basis of a 360-day year of 12 months of 30 days each. Accrued but unpaid interest will be added to the principal balance of each Tax Increment Note semi-annually on August 1 and February 1 of each year. 25 (2) The Authority will make payments on account of each Tax Increment Note on August 1 and February 1 of each year after each receipt of Tax Increment. The amount of Tax Increment available to pay each Tax Increment Note shall equal the Tax Increment, less the amount of Tax Increment applied to pay obligations senior in right to payment to such Note as provided in Section 5.8. The Tax Increment applied to payment of the Tax Increment Notes will first pay accrued but unpaid interest thereon and then reduce the outstanding principal balance. (3) The source of payment of the principal of and interest on Tax Increment Notes shall be limited to Tax Increment. The Tax Increment Notes shall not be a general obligation of the City or Authority. Section 5.7. Assignment of Tax Increment Notes. The Redeveloper may assign and pledge the Tax Increment Notes to secure any Construction Loan and may transfer the Tax Increment Notes to any entity controlling, controlled by or under common control with the Redeveloper. Otherwise, no Tax Increment Note shall be assignable nor transferable without the prior written consent of the Authority; provided, however, that such consent shall not be unreasonably withheld or delayed if: (a) the assignee or transferee delivers to the Authority a written instrument acknowledging the limited nature of the Authority's payment obligations under the Tax Increment Note, and (b) the assignee or transferee executes and delivers to the Authority a certificate, in form and substance satisfactory to the Authority, pursuant to which, among other things, such assignee or transferee represents that (i) the Tax Increment Note is being acquired for investment for such assignee's or transferee's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, (ii) the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same, (iii) the assignee or transferee is an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended, (iv) the assignee or transferee, either alone or with such assignee's or transferee's representatives, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the prospective investment in the Tax Increment Note and the assignee or transferee is able to bear the economic consequences thereof, (v) in making its decision to acquire the Note, the assignee or transferee has relied upon independent investigations and, to the extent believed by such assignee or transferee to be appropriate, the assignee's or transferee's representatives, including its own professional, tax and other advisors, and has not relied upon any representation or warranty from the Authority or the City, or any of their officers, employees, agents, affiliates or representatives with respect to the value of the Tax Increment Note, (vi) neither the Authority nor the City has made any warranty, acknowledgment or covenant, in writing or otherwise, to the assignee or transferee regarding the tax consequences, if any, of the acquisition and investment in the Tax Increment Note, (vii) the assignee or transferee or its representatives have been given a full opportunity to examine all documents and to ask questions of, and to receive answers from, the Authority and its representatives concerning the terms of the Tax Increment Note and such other information as the assignee or transferee desires in order to evaluate the acquisition of and investment in the Tax Increment Note, and all such questions have been answered to the full satisfaction of the assignee or transferee, (viii) the assignee or transferee has evaluated the merits and risks of investment in the Tax Increment Note and has determined that the Note is a suitable investment for the assignee or transferee in light of such party's overall financial condition and prospects, (ix) the Tax Increment Note will be characterized as a "restricted security" under the federal securities laws because the Tax Increment Note is being acquired in a transaction not involving a public offering and that under such laws and applicable regulations such security may not be resold without registration under the Securities Act of 1933, as amended, except in certain limited circumstances, and (x) no market for the Tax Increment Note exists or is intended to be developed. 26 g0eti0n g.R. Uee of Tax Increment: Pri0ritieg. Tax Increment ghall be al3Dlied in the following priority: (a) First, for payment of principal of and interest on the City Cleanup Bonds when due (with respect to Tax Increment from Lost Lake only); (b) Second, for payment of amounts due to the Redeveloper pursuant to Section 7.5(b), (c) Third, for payment of principal of and interest on any City PI Bonds when due; (d) Fourth, for payment of principal of and interest on any Authority Bonds when due; (e) F~fih, for the portion of the Authority's administrative fee equal to five percent (5%) of the lesser of the total tax increment expenditures authorized by the Plan or the total Tax Increment expended for the Project; (f) Sixth, to reimburse the Redeveloper for special assessments paid by the Redeveloper with respect to the Parking Ramp financed with City Parking Ramp Bonds; (g) Seventh, for payment of principal of and interest on any Gap Tax Increment Notes issued to the Redeveloper; (h) Eighth, for payment of principal of and interest on any Shortfall Tax Increment Notes issued to any of the Redeveloper, the City or the Authority (including any interfund loans created in lieu of issuance of Notes to the City or the Authority); (i) Ninth, for payment of principal of and interest on any Deferred Tax Increment Notes issued to the Redeveloper and the Authority (including any interfund loan created in lieu of issuance of a Note to the Authority); and (j) Tenth, for such other purposes as the Authority determines in accordance with the Tax Increment Act and the Plan. Section 5.9. Capitalized and Construction Period Interest. Capitalized interest on the City Bonds and Authority Bonds and construction period interest shall be Eligible Project Costs. Construction period interest will be calculated based on the actual rate charged by the third-party lender. Section 5.10. Administration of Project Revenues. The Redeveloper shall deliver to the Authority quarterly sales reports prepared by the Redeveloper and year-end compilation reports which have been prepared by a certified public accountant and certified by the Redeveloper, with both types of reports to not be more limited in scope than the reports which are required to be submitted to its investors and lenders. 27 ARTICLE VI CONSTRUCTION OF SITE IMPROVEMENTS AND MINIMUM IMPROVEMENTS Section 6.1. Public Improvements. Except for those Public Improvements to be constructed by the City as indicated on Exhibit E, the Redeveloper will construct the Public Improvements in accordance with City specifications and subject to approval by the City engineer. Upon completion of the Public Improvements the City will inspect the same, and if constructed in compliance with City specifications, will accept the same as public property. Public Improvements constructed by the City shall be coordinated with the Redeveloper to ensure Project compatibility. Section 6.2. Construction of Minimum Improvements and Site Improvements. Subject to the acquisition of the Redevelopment Property, the Redeveloper agrees that it shall perform and pay for all Site Improvements described in Exhibit F and construct the Minimum Improvements in accordance with the approved Concept Plans with respect to those Phase or Phases as to which the Redeveloper has determined to proceed. Section 6.3. Permits and Fees. (a) Prior to the Commencement of Construction, the Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before such construction may be undertaken. (b) Except as specifically set forth below and in Section 3.3, the Redeveloper shall observe the customary requirements for and shall pay the normal and customary City fees and expenses for the approval and construction of the Project, including, without limitation, bonding requirements, building permit fees, state surcharges, sewer accessibility charges (SAC) and water accessibility charges (WAC). (c) The Redeveloper shall pay a park dedication fee of $46,600 for Phase I, $23,300 for Phase II and $23,300 for Phase III, with each fee payable upon final plat approval for the Phase to which the fee relates. The park dedication fee payable with respect to Phases II and III shall not be payable if such Phase is not constructed. Section 6.4. Demolition. The Redeveloper shall, at its sole expense, and in accordance with City requirements, raze and remove all structures on the Redevelopment Property, including vacated City or County roadways. Utilities shall be abandoned in place as permitted by City ordinance. Section 6.5. Soil Corrections and Contamination. Except as provided in Section 4.10 with respect to the dump remediation and compaction in Lost Lake, as between the parties hereto and the City, the Redeveloper shall have the sole responsibility for and bear the cost necessary to make any necessary soil correction or to remedy or otherwise respond to the existence of any contamination or pollution in, on or under the Redevelopment Property. Section 6.6. Concept Plan and Construction Plans. (a) Concept Plan. 28 (1) Approval 0flnitial Submission, The Redeveloper has submitted a Concept Plan to the Authority which has been approved. (2) Auditors Road Revision. The Redeveloper shall submit a revised Concept Plan for Auditors Road which incorporates the former "hotel parcel." If the Redeveloper elects to construct Auditors Road as Phase II, such revised Concept Plan shall be submitted no later than six (6) months before Commencement of Construction of Phase II Minimum Improvements. The Authority shall approve or reject (in whole or in part) such Concept Plan in writing within thirty (30) days after the date of receipt thereof. The Authority may not reject the Auditors Road Concept Plan solely because it does not include a hotel if the proposed use for the former "hotel parcel" is consistent with the proposed uses for the Project as a whole. If no written rejection is made within said time period, the Concept Plan shall be deemed approved by the Authority. Any rejection shall set forth in detail the reasons therefor. The Authority shall have the right to decline to approve the proposed revision to the Minimum Improvements for Auditors Road if in the Authority's reasonable discretion it appears that the market value for the Minimum Improvements for the Phase as a whole will be less than that projected in the Pro Forma. If the Authority rejects the revised Concept Plan, in whole or in part, the Redeveloper may submit a new or corrected Concept Plan at any time after receipt by the Redeveloper of the notice of rejection. The Authority's approval of the Concept Plan shall not be unreasonably withheld. (b) Construction Plans. (1) Submission and Contents. Prior to the Redeveloper's Commencement of Construction of the Minimum Improvements for a Phase, the Redeveloper shall submit to the Authority Construction Plans for the Minimum Improvements in such Phase. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity in all material respects with this Agreement, the Concept Plan, and all applicable state and local laws and regulations. The Construction Plans must address and contain the following: (i) The location, nature and construction timing of all Public Improvements to be constructed to serve and benefit the Phase, and all other Public Improvements that are required as a consequence of the Project. Required improvements include the improvements described in Exhibit E. (ii) The plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property, including the Minimum Improvements and the related Site Improvements, which shall include at least the following: (1) site plan; (2) floor plan for each floor; (3) cross sections of each (length and width); (4) elevations (all sides); (5) landscape plan; and (6) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. Such documents need not be as detailed as the documents which are submitted to the building officials of the City. (2) Approval. The Authority shall approve the Construction Plans in writing if: (i) the Construction Plans conform in all material respects to the terms and conditions of the Concept Plan and this Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances, rules and regulations; and (iii) the Construction Plans are adequate to provide for the construction of the Minimum Improvements. Upon the Redeveloper's submittal of the Construction Plans to the Authority, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after the date of their receipt by the Authority. Such rejection shall set forth in detail the 29 reasons therefor. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within thirty (30) days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, if constructed in accordance with said plans) comply with the provisions of this Agreement relating thereto. The Construction Plans shall not be rejected due to any objection which could have been raised upon review of the Concept Plan and corrected more economically at that time. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement and applicable federal, State and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of any Event of Default. (c) Changes. A change to the Concept Plan or Construction Plans following approval by the Authority need not be resubmitted to the Authority unless such change would increase or decrease the square footage of the Minimum Improvements by ten percent (10%) or more or would decrease the value of the Minimum Improvements by two percent (2%) or more. Other than as set forth above, if the Redeveloper desires to make any material change in the Concept Plan or Construction Plans after approval thereof by the Authority, then the Redeveloper shall submit the proposed change to the Authority for its approval. If the Concept Plan or Construction Plans, as modified by the proposed change, conform(s) to the requirements of this Section with respect to such previously approved Concept Plan or Construction Plans, the Authority shall approve the proposed change and notify the Redeveloper in writing of its approval. Such change in the Concept Plan or Construction Plans shall, in any event, be deemed approved by the Authority unless rejected in writing by the Authority, in whole or in part, within twenty (20) days after receipt of the notice of such change, setting forth in detail the reasons therefor. (d) Submission to Arbitration. If any Construction Plans submitted to the Authority for approval are rejected twice, the parties agree to submit the matter to arbitration pursuant to Section 13.2. Section 6.7. Commencement and Completion of Construction. (a) The Redeveloper shall Commence Construction and Complete Construction of the Minimum Improvements according to the following schedules: (1) Phase I: Commencement of Construction on or about September 1, 2005; Completion on or about December 31, 2008. '(2) Phase II: Commencement of Construction on or about September 1, 2006; Completion on or about December 31, 2009. (3) Phase III: Commencement of Construction on or about September 1, 2007; Completion on or about December 31, 2009. The Redeveloper may elect to delay commencement of Phase IH for up to eighteen (18) months. 30 (b) Start dates for all Phases shall be subject to: (1) Unavoidable Delays, (2) Delay in Commencement of Construction of a prior Phase, (3) The Authority acquiring all of the parcels in a particular Phase that it has undertaken to acquire, (4) The Authority conveying the Authority Parcels in that Phase to the Redeveloper, (5) Receipt of all necessary governmental approvals for construction of the Minimum Improvements for that Phase, including dredging permits and shoreland density variances, (6) Approval and recordation of the final plat for that Phase, and (7) With respect to Auditors Road only, completion of rerouting of County Road 15 and reconstruction of the sewer line and MCES lift station along Auditors Road, if required. (c) If Commencement of Construction of a Phase is delayed, the Redeveloper shall, within fifteen (15) days after the Redeveloper's becoming aware of such delay, notify the Authority thereof in writing and of the cause thereof. Construction for the Phase will commence within 90 days of the resolution of the cause of the delay subject to winter delay of streets, utilities and grading. If a start date would fall between November 1 and March 1, it shall be extended until the following May 1. The corresponding completion date shall be extended by an equal number of days. (d) If Commencement of Construction of a Phase is delayed more than 12 months due to any of the delays described in subparagraph (b) above, the Redeveloper shall have the right to re-examine the Feasibility of that Phase based on then-prevailing cost estimates and market conditions. Section 6.8. Certificate of Completion. (a) Promptly after completion of the Minimum Improvements for each Building in accordance with this Agreement, the Authority will furnish the Redeveloper with a Certificate of Completion for such Building in recordable form. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the Redeveloper's obligations to construct the Minimum Improvements for such Building. (b) If the Authority shall refuse or fail to provide any Certificate in accordance with the provisions of this Section, the Authority shall, within ten (10) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of this Agreement, or is otherwise in default, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such Certificate. (c) The construction of the Minimum Improvements for each for-sale residential or commercial condominium Building shall be deemed to be completed in accordance with the Redeveloper's obligations hereunder when the City has issued a Certificate of Occupancy for any individual residential unit of that Building. 31 ARTICLE VII DETERMINATION OF FEASIBILITY OF A PHASE; PAYMENT OF CERTAIN AMOUNTS TO REDEVELOPER Section 7.1. Determination of Feasibility. (a) The concept of "Feasible" or "Feasibility" shall be deemed to describe a Phase only if the Redeveloper determines that projected Project Revenues for that Phase equal or exceed projected Project Costs for that Phase (excluding the Deferred Developer Fee), based on then-current market conditit)ns. (b) For the purpose of determining Feasibility, at the Redeveloper's election, the projected present value of the Tax Increment not required for debt service on City Bonds and Authority Bonds included in Project Revenues pursuant to clause (vii) of the definition of "Project Revenues" in Section 1.1 shall reflect only the projected present value of the first fifteen (15) years of such Tax Increment. Section 7.2. Effect of Redeveloper Electing Not to Proceed with a Phase. (a) If the Redeveloper elects not to proceed with a Phase because such Phase is not Feasible: (1) Management Fee. The Redeveloper shall be paid the Management Fee (to the extent not previously paid) for completed Phases. (2) Developer Fee. The Redeveloper shall be paid the Developer Fee for completed Phases. (3) Deferred Developer Fee. The Redeveloper shall be paid the Deferred Developer Fee for completed Phases. (4) Third-PartY Costs. The Redeveloper shall be reimbursed (but only from Tax Increment from completed Phases) for all unreimbursed third-party costs incurred by the Redeveloper with respect to any Phase, whether or not completed. (b) Feasible: If the Redeveloper elects not to proceed with a Phase even though such Phase is (1) Management Fee. The Redeveloper shall be paid the Management Fee (to the extent not previously paid) for completed Phase(s). (2) Developer Fee. (i) Developer Fee for Phase I. If only Phase I is completed, the Redeveloper shall be paid 50% of the (ii) If Phases I and II are completed, the Redeveloper shall be paid one hundred percent (100%) of the Developer Fee for both Phases I and II. 32 (3) Deferred Developer Fee. The Redeveloper shall not receive the Deferred Developer Fee for any Phase. (4) Third-PartY Costs. The Redeveloper shall be reimbursed (but only from Tax Increment from completed Phases) for all unreimbursed third-party costs incurred by the Redeveloper with respect to any Phase, whether or not completed, provided that such costs paid for reports or studies that have been provided to the Authority or other services that would assist another redeveloper or the Authority to redevelop uncompleted Phases. (c) In all cases where the Redeveloper elects not to proceed with a Phase (regardless of whether Feasibility exists): (1) If the Redeveloper elects not to proceed with Phase I, the Redeveloper shall reimburse the Authority's and the City's out-of-pocket third-party costs associated with the Project and, at the Authority's request, shall also provide copies to the Authority of all reports or studies relating to the Project. The Authority shall reimburse the Redeveloper for the cost of such reports or studies so requested. (2) The Redeveloper shall promptly reimburse the Authority for any awards, relocation payments or discontinuance fees relating to any eminent domain proceedings pending at the time of such termination and any relocation benefits that the Authority is subsequently required to pay based on activities which occurred prior to receipt by the Authority of notice of the Redeveloper's election not to proceed. The Redeveloper shall be reimbursed (but only from Tax Increment for completed Phases) for such costs. Title to any parcels as to which the Redeveloper has been required to pay the damage award pursuant to this subsection (2) shall be conveyed to the Redeveloper, subject to the Authority's rights to reconveyance set forth in subsection (4) below. (3) To the extent that Project Revenues exceed Project Costs for all completed Phases following payment or reimbursement by the Authority to the Redeveloper of all amounts owing to the Redeveloper pursuant to this Article, any funds remaining shall be the property of the Authority and shall be promptly remitted to the Authority. (4) If the Redeveloper owns parcels or has entered into binding option or purchase agreements to purchase parcels within a Phase that will not proceed, then, at the Authority's request, the Redeveloper shall convey such parcels or assign such option and purchase agreements to the Authority for consideration equal to the Redeveloper's cost together with interest at a rate of seven and one-half percent (7.5%) per annum from the date the Redeveloper actually paid the cost. (5) The Redeveloper and the Authority will execute a release or termination of this Agreement. Section 7.3. Effect of Completion of all Three Phases. If the Redeveloper completes all three Phases, it shall be paid the Management Fee, the Developer Fee and the Deferred Developer Fee with respect to all three Phases. Section 7.4. Determination of Land Sales Prices. (a) Prior to the commencement of each Phase, the Redeveloper and the Authority shall agree upon the land sale prices to builders or users. If land sales are negotiated with unrelated parties in an 33 arm's length transaction, those prices shall be determinative. If a site is to be sold to a related party (i.e., a party which the Redeveloper, or an investor in the Redeveloper, either controls, is controlled by or is under common control with) or developed by the Redeveloper, the land sale price shall be determined by agreement between the Authority and Redeveloper or, if agreement cannot be reached, by an appraisal conducted by an appraiser mutually agreeable to the parties. The appraisal value used shall be the "development," "wholesale" or "discounted" value (which takes into account the expected market absorption period, present values, marketing and holding costs and other factors), rather than the "retail" value. In the case of sales to unrelated parties, the Redeveloper shall certify to the Authority that such parties would be considered unrelated as described in the preceding sentence. (b) Land sales prices determined pursuant to subsection (a) shall be determinative for purposes of determining the Feasibility of Phases II and III pursuant to Section 7.1. Section 7.5. Payment of Fees and Costs to the Redeveloper. (a) (1) Management Fee. The Management Fee shall be payable from land sales proceeds on an ongoing basis and, at the Redeveloper's election, as Project Costs are incurred. (2) Developer Fee. If and when payable to the Redeveloper pursuant to this Section, the Developer Fee shall be paid from land sales proceeds. (3) De_£erred Developer Fee. If and when payable to the Redeveloper pursuant to this Article, the Deferred Developer Fee shall be paid from land sales proceeds. All Fees shall be deemed to have been paid from land sales proceeds if, at the conclusion of the Project, total land sales proceeds from all completed Phases exceed the total of all Fees paid and payable to the Redeveloper pursuant to this Article. (b) If the City does not perform all of the actions set forth in Sections 3.2(t) (relating to street vacations) and 3.3(a) (relating to other City actions to facilitate the Project), or the Authority fails to perform the actions set forth in Section 4.3 (relating to eminent domain), or the Redeveloper elects to terminate this Agreement pursuant to Section 4.8(a)(1) (relating to condition of title of Authority parcels), and (1) Such nonperformance results in either the non-Feasibility of a Phase, or directly reduces the Feasibility of a future Phase, then the Redeveloper will be reimbursed by the Authority for all of its third-party costs or, in the case of Section 3.3(a)(4), increases in City fees, and (2) If such nonperformance results in the non-Feasibility of a Phase, then the Redeveloper will be entitled to receive the Management Fee, the Developer Fee and the Deferred Developer Fee with respect to all completed Phases. Such third-party costs and Fees shall only be payable to the extent that there are sufficient Project Revenues from completed Phases. 34 C ARTICLE VIII LOST LAKE TAX DEFICIENCY GUARANTEE; LETTER OF CREDIT; MAXWELL MORTGAGE Section 8.1. Lost Lake Tax Deficiency Guarantee. (a) The Redeveloper guarantees that the Minimum Market Value for Lost Lake shall be: (i) $10,000,000 as of January 2, 2008 (for tax payable year 2009) and (ii) $16,000,000 for each January 2nd thereafter, provided, that (A) these dates shall be revised to reflect any delay in the start date for Lost Lake permitted by Section 6.7(b) and (c), and (B) these amounts shall be reduced by the amount of the original Assessor's Market Value of all residential units in Lost Lake which have been sold by the Redeveloper (i.e., for each such residential unit, the Assessor's Market Value of such unit as of the first January 2nd following its completion). (b) On an annual basis, the City shall calculate whether any tax deficiency (the "Tax Deficiency") exists resulting from the Assessor's Market Value for Lost Lake being less than the Minimum Market Value, with the Tax Deficiency to be calculated as set forth in paragraph (c) below. In the event that the City determines that a Tax Deficiency exists, the City shall provide a written notice of such Tax Deficiency to the Redeveloper. (No notice shall be required upon the occurrence of an event referred to in Section 12.1 (d)(i) or (iv).) The Redeveloper shall pay to the City the amount of the Tax Deficiency for such year on or before the date that is thirty (30) days after the date of delivery of the written notice of such Tax Deficiency (or, if no notice is required to be delivered, the date that is thirty (30) days after the City determines that a Tax Deficiency exists) or, at the election of the Redeveloper, the Tax Deficiency shall be paid in two equal installments on the dates provided by law for the payment of real estate taxes. Failure of the Redeveloper to pay the Tax Deficiency shall entitle the Authority to draw upon the Letter of Credit as set forth in Section 8.2 or to take any actions permitted by the terms of the Maxwell Mortgage, delivered in accordance with the terms of Section 8.3, including foreclosure of the mortgage lien granted by the Maxwell Mortgage. (c) The Tax Deficiency for any tax payable year shall be calculated as the product of (i), (ii) and (iii) below: (i) The difference between the Minimum Market Value for Lost Lake set forth in (a) above less the Assessor's Market Value for Lost Lake (for purposes of this calculation, the Assessor's Market Value for Lost Lake shall be reduced by the Assessor's Market Value of all residential units in Lost Lake which have been sold by the Redeveloper), times (ii) The lesser of (A) the class rate or rates in effect for such tax payable year, and (B) the class rate or rates used to calculate the original net tax capacity certified by the County Auditor for the Tax Increment District upon adoption of the Tax Increment Plan pursuant to M.S. Section 469.177, subdivision l(a), times 35 (iii) The lesser of (A) the local tax rate in effect for such tax payable year, and (B) the original local tax rate certified by the County Auditor as applicable to the Tax Increment District pursuant to M.S. Section 469.177, subdivision 1 a. (d) The Tax Deficiency Guarantee imposed by this Section shall remain in effect until the Assessor's Market Value first reaches $16,000,000, regardless of whether the Assessor's Market Value subsequently drops below $16,000,000. (e) If the cost to the City not defrayed by grants of the dump remediation contemplated by Section 4.10 is significantly less than $3,500,000, the parties will agree to calculate the minimum Assessor's Market Value for Lost Lake necessary for principal of and interest on the City Cleanup Bonds to be fully paid from Lost Lake Tax Increment. If the minimum Assessor's Market Value so calculated is less than the Minimum Market Value, the Minimum Market Value shall be reduced to that amount, and the initial face amount of the Letter of Credit and the $12,000,000 referred to in Section 8.2 shall both be reduced proportionately. Section 8.2. Letter of Credit. (a) As security for payment of the Tax Deficiency Guarantee, the Redeveloper shall furnish or cause to be furnished to the Authority an irrevocable Letter of Credit reasonably acceptable in form and substance to the Authority from a financial institution reasonably acceptable to the Authority. The amount of the Letter of Credit from time to time shall not be less than as set forth below: (i) $1,000,000 .until the Assessor's Market Value for Lost Lake first reaches $12,000,000, and thereafter: (ii) For each additional $1,000,000 of Assessor's Market Value for Lost Lake over $12,000,000, the amount of the Letter of Credit may be reduced by one-fourth (1/4) of its original face amount so that when the Assessor's Market Value first reaches $16,000,000 the Letter of Credit shall be released. The initial face amount of the Letter of Credit and the $12,000,000 and $16,000,000 amounts in this subparagraph (a) shall be subject to reduction as set forth in Section 8.1 (e). (b) The Letter of Credit shall be held by the Authority as collateral to secure the Tax Deficiency Guarantee as provided herein. If the Redeveloper fails to make payment in accordance with Section 8.1, the Authority may draw upon the Letter of Credit in the amount of such payment. The Authority shall not present the Letter of Credit for payment unless it shall have given Redeveloper notice as provided in Section 8.1. (c) Not less than thirty (30) days prior to the expiration of the Letter of Credit, or any renewal thereof, the Redeveloper shall furnish the Authority with evidence satisfactory to the Authority that the Letter of Credit has been renewed or that there is no necessity therefor under the terms hereof. If the Redeveloper does not furnish such evidence by the deadline imposed by this paragraph, the Authority may draw the full amount of the Letter of Credit. In such event, the Authority may use the funds drawn only for the purposes permitted hereunder and shall release such funds if and to the same extent that the Letter of Credit would have been required to be released hereunder. If the Redeveloper provides a substitute Letter of Credit, the Authority shall release funds in the amount of such substitute Letter of Credit to the Redeveloper. Any Letter of Credit provided pursuant to this Section 8.2 shall contain a provision that the provider thereof may not cancel or modify it without giving written notice to the 36 Redeveloper and the Authority at leagt thirty (30) dayg before the cancellation or modification becomes effective. Section 8.3. Maxwell Mortgage. (a) As additional security for payment of the Tax Deficiency Guarantee, the Redeveloper shall execute the Maxwell Mortgage in the amount of $500,000 substantially in the form attached as Exhibit M. (b) Upon subdivision or replatting of the parcels subject to the Maxwell Mortgage, the Authority agrees to release the Maxwell Mortgage upon delivery to the Authority of a new restated Maxwell Mortgage that subjects only the portion of such parcels which are to be redeveloped by the Redeveloper for a commercial use to the lien of the Maxwell Mortgage. (c) If the cost to the City not defrayed by grants of the dump remediation contemplated by Section 4.10 is less than $3,400,000, for each $100,000 reduction in cost below $3,400,000 the Maxwell Mortgage shall be reduced by $170,000. If the cost is less than $3,100,000 the Maxwell Mortgage shall be released. (d) In the event of a sale of any part of the real property subject to the Maxwell Mortgage, the Authority shall release the real property from the lien of the Maxwell Mortgage upon escrow by the Redeveloper of $500,000 of the sale proceeds therefrom and/or delivery of alternative security acceptable to the Authority. (e) When the Assessor's Market Value for Lost Lake first reaches $18,000,000, the Maxwell Mortgage (or sales proceeds or alternative security referred to in paragraph (b) above) shall be released. 37 ARTICLE IX RIGHT OF FIRST REFUSAL AS TO 110 SOUTH Section 9.1. Right of First Refusal. The Redeveloper shall have the preemptive right for a period of four (4) years from the date of City approval of the Tax Increment District to redevelop any or all of the parcels in 110 South listed on Exhibit I on the same terms and conditions as those of any bona fide proposal received by and acceptable to the Authority. Before entering into any contract for private redevelopment, the Authority shall give the Redeveloper written notice of the name and address of the proposed redeveloper and the terms and conditions of the proposed redevelopment (hereinafter, the "Proposal"). Section 9.2. Election to Exercise Right. Upon receipt of the Authority's notice and the terms and conditions of the Proposal, the Redeveloper shall have sixty (60) days within which to elect to redevelop the subject parcels on the terms set forth in the Proposal. If the Redeveloper notifies the Authority of its election to match the Proposal within such period, then the Authority and the Redeveloper shall execute a contract for private redevelopment within a period of one hundred twenty (120) days after the Redeveloper's notice of election to match the Proposal. If, after notifying the Authority of its election, the Redeveloper fails to execute a contract for private redevelopment for any reason other than a default by the Authority or the failure to occur of a contingency provided for in the Proposal, then (i) the Authority may exercise against the Redeveloper any remedy which the Authority would be able to exercise against the proposed redeveloper according to the terms of the Proposal, and (ii) the Redeveloper shall have no further fights under this Article with respect to the same or any subsequent offer to redevelop any parcels in 110 South. Section 9.3. Non-Exercise of Right. If the Redeveloper notifies the Authority that the Redeveloper does not intend to exercise its preemptive rights with respect to the Proposal, or fails to notify the Authority of its election to redevelop the subject parcels within the period specified, then (i) the Redeveloper shall, within ten (10) days after request by the Authority, execute and deliver a certificate confirming that the Redeveloper has elected not to exercise its preemptive rights and (ii) the Authority may execute a contract for private redevelopment with the offering party within six (6) months thereafter, on the same terms as those set forth in the Proposal. If a contract has not been executed within that time period, or if the terms of the Proposal are changed in a way that is materially less favorable to the Authority, then the Authority shall not execute a contract for private redevelopment with the third- party offeror without first offering the changed Proposal to the Redeveloper in accordance with this Article. The Redeveloper's preemptive rights under this Article shall expire and be of no further effect with respect to the parcels covered by the Proposal following the Authority's execution of a contract for private redevelopment with the third-party offeror. The Authority shall, at the Redeveloper's request, provide the Redeveloper with copies of the executed contract. The Redeveloper's right of first refusal shall remain in effect as to any parcels in 110 South that were not covered by the Proposal. Section 9.4. Inclusion of Parcels in a Tax Increment District. To the extent that parcels on Exhibit I are not included in the Tax Increment District, the City agrees to consider adding as many of such parcels as possible to the District, or including them in a new District, at such time as such parcels become eligible for inclusion. This Section shall remain in effect until the Redeveloper's right of refusal as to 110 South expires or is terminated pursuant to this Article. 38 ARTICLI~ X INSURANCE Section 10.1. Insurance. (a) The Redeveloper will provide and maintain or cause to be provided or maintained at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the Authority, furnish the Authority with proof of payment of premiums on: (1) builder's risk insurance, written on the so-called "Builder's Risk - Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so- called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content reasonably satisfactory to the Authority; (2) comprehensive general liability insurance together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (3) workers' compensation insurance, with statutory coverage. (b) All insurance required by this Article shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate(s) or binder(s) of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall furnish the Authority with evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, or that there is no necessity therefor under the terms hereof. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combinahon thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (c) The Redeveloper shall, for time to time, provide the Authority with evidence satisfactory to the Authority that the Redeveloper's subcontractors are maintaining workers' compensation insurance with statutory coverage. 39 ARTICLE XI PROHIBITIONS AGAINST ASSIGNMENT AND TRANSFER; INDEMNIFICATION Section 11.1. Representation as to Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property, and its other undertakings pursuant to this Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property in accordance with the provisions of this Agreement and not for speculation in land holding. The Redeveloper further recognizes that, in view of (a) the importance of the redevelopment of the Redevelopment Property to the general welfare of the City; (b) the substantial financing and other public aids that have been made available by the City or the Authority for the purpose of making such redevelopment possible; and (c) the fact that any act or transaction involving or resulting in a significant change in the identity of the parties in control of the Redeveloper or the degree of their control is for practical purposes a transfer or disposition of the property then owned by the Redeveloper, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper further recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 11.2. Prohibition Against Transfer of Property and Assignment of Agreement. The Redeveloper represents and agrees that prior to the issuance of the final Certificate of Completion for the Minimum Improvements or the Termination Date: (a) Except only by way of security for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to the Project under this Agreement, or any other purpose authorized by this Agreement, the Redeveloper (except as so authorized) has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or any transfer in any other mode or form, of this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without prior written approval by the Authority in its sole discretion. Notwithstanding the foregoing, (i) the business entity and equity owners of the Redeveloper may change as long as majority control of the Redeveloper continues to be held by one or more of the original equity owners of the Redeveloper, as long as such change does not materially impair the ability of the Redeveloper to complete the Project, (ii) the Redeveloper may assign its rights under the Agreement to one or more redevelopers, subject to the consent of the Authority which shall not be unreasonably withheld, (iii) the Redeveloper may enter into agreements for the sale of all or part of the Redevelopment Property to developers who will construct a portion of the Minimum Improvements, and (iv) the Redeveloper may enter into purchase agreements for the sale of individual residential units within the Project in the ordinary course of the Redeveloper's business; provided that none of the actions described in this sentence shall be construed to relieve the Redeveloper of all of its obligations under this Agreement. (b) The Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such approval that: (1) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the Redeveloper's obligations hereunder. 40 C (2) Any proposed transferee, by instrument in writing satisfactory to the Authority, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Redeveloper hereunder from which the Redeveloper seeks to be released and agrees to be subject to all of the conditions and restrictions to which the Redeveloper is subject unless the Redeveloper agrees to continue to fulfill those obligations. Section 11.3. Release and Indemnification Covenants. (a) The Redeveloper covenants and agrees that the City, the Authority and the governing body members, officers, agents, servants and employees of either of them (collectively, the "Indemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or resulting from any defect in the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (a) shall not apply to any loss resulting from negligent, willful or wanton misconduct of any of the Indemnified Parties. (b) The Redeveloper agrees to protect and defend the Indemnified Parties, now or forever, and further agrees to hold the Indemnified Parties harmless from any claim, demand, suit, action or other proceeding by any person or entity arising or purportedly arising from this Agreement or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements, due to any act, including negligence, of the Redeveloper or of others acting on the behalf or under the direction or control of the Redeveloper; provided, however, that the Redeveloper's indemnification obligations in this subparagraph (b) shall not apply to (i) any loss resulting from any negligent or willful misrepresentation or any negligent, willful or wanton misconduct of any of the Indemnified Parties or (ii) except as otherwise provided in Article IV, the use of eminent domain if exercised by the Authority. (c) None of the Indemnified Parties shall be liable for any damage or injury to the person or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be on or about the Redevelopment Property or Minimum Improvements due to any act or negligence of any person, other than the negligence or misconduct of an Indemnified Party. (d) Except as specifically provided in this Agreement to the contrary, none of the Indemnified Parties shall be liable to the Redeveloper or to any third party for any consequential or other damages that may arise out of delays of any kind relating to activities undertaken pursuant to this Agreement, including but not limited to delays due to environmental conditions, court challenges or elements outside the control of the Authority. (e) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (f) Nothing in this Section is intended to waive any municipal liability limitations contained in Minnesota Statutes, particularly Chapter 466. 41 ARTICLE XlI EVENTS OF DEFAULT Section 12.1. Redeveloper Events of Default. Subject to Unavoidable Delays, the following are Events of Default of the Redeveloper: (a) Failure to submit the Concept Plan in accordance with Section 6.6, (b) Failure to commence or complete construction of the Minimum Improvements pursuant to the terms, conditions and limitations of Article VI, (c) Failure to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed hereunder, or (d) Prior to Completion of Construction of Phase I (or of Phases II and III, if the Redeveloper has elected to proceed with those Phases) the Redeveloper shall: (i) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the United States Bankruptcy Code or under any similar federal or state law; (ii) make an assignment for the benefit of its creditors; (iii) admit in writing its inability to pay its debts generally as they become due; or (iv) be adjudicated as bankrupt or insolvent, or if a petition or answer proposing the adjudication of the Redeveloper as a bankrupt or proposing its reorganization under any present or future federal bankruptcy act or any similar federal or State law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof, or a receiver, trustee or liquidator of the Redeveloper or of the Redevelopment Property, or part thereof shall be appointed in any proceeding brought against the Redeveloper and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. Section 12.2. Authori _ty Events of Default. Subject to Unavoidable Delays, an Event of Default of the Authority shall be failure by the Authority to substantially observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed hereunder, or failure of the City to substantially observe or perform any of the actions described herein as actions which the parties contemplated would be taken by the City in conjunction with this Agreement. Section 12.3. Authority Remedies on Default. Whenever any Event of Default referred to in Section 12.1 occurs, the Authority may take any one or more of the following actions after providing thirty (30) days' written notice to the Redeveloper of the Event of Default (except that no notice to the Redeveloper is required on or after the occurrence of an event described in Section 12.1 (d)(i) or (iv)), but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default is not reasonably susceptible to being cured within said thirty (30)-day period (whether due to Unavoidable Delays or otherwise), and the Redeveloper fails to provide the Authority with written assurances, deemed satisfactory in the reasonable discretion of the Authority, that the Event of Default will be cured as soon as reasonably possible: (a) Suspend its performance under this Agreement until it receives assurances from the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default and continue its performance under this Agreement. 42 Agreement. Terminate this J~greement ancot any Tax laereraent }4oteg ~mecl I3urgll~llt t0 tb,~g (c) Withhold any Certificate of Completion. (d) Suspend any payments due to the Redeveloper, including those due under any Tax Increment Note issued in accordance with this Agreement. (e) Utilize any payments otherwise due to the Redeveloper, including those due under any Tax Increment Note, to cover the payment of any amounts due from the Redeveloper. (f) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Authority, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Redeveloper under this Agreement. (g) In addition to the foregoing, if the Event of Default consists of a failure to pay amounts due pursuant to the Tax Deficiency Guarantee, the Authority may draw upon the Letter of Credit until it is exhausted and then may foreclose on the Maxwell Mortgage. Section 12.4. Redeveloper Remedies on Default. Whenever any Event of Default referred to in Section 12.2 occurs, the Redeveloper may take any one or more of the following actions after providing thirty (30) days' written notice to the Authority of the Event of Default, but only if the Event of Default has not been cured within said thirty (30) days, or if the Event of Default is not reasonably susceptible to being cured within said thirty (30)-day period (whether due to Unavoidable Delays or otherwise), and the Authority fails to provide the Redeveloper with written assurances, deemed satisfactory in the reasonable discretion of the Redeveloper, that the Event of Default will be cured as soon as reasonably possible: (a) Suspend its performance under this Agreement until it receives assurances from the Authority, deemed adequate by the Redeveloper, that the Authority will cure its default and continue its performance under this Agreement. (b) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to the Redeveloper, including any actions to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant of the Authority under this Agreement. Section 12.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Redeveloper or the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. Section 12.6. No Additional Waiver Implied by One Waiver. In the event any agreement contained herein should be breached by either party and thereafter waived by the non-breaching party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 43 ARTICLE XIII ADDITIONAL PROVISIONS Section 13.1. Conflict of Interest. No member, official, or employee of the Authority shall have any direct personal interest in this Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is directly interested. Section 13.2. Arbitration. All matters in question between the parties which this Agreement requires to be submitted to arbitration shall be decided by mandatory and binding arbitration in accordance with the rules of the American Arbitration Association ("AAA") currently in effect, unless the parties mutually agree otherwise. The following provisions shall apply: (a) Demand for arbitration shall be filed in writing with the other party and with the AAA. Any demand for arbitration shall be made within a reasonable time after the matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such matter in question would be barred by the applicable statute of limitations or the terms of this Agreement. (b) No arbitration arising out of or relating to this Agreement shall include, by consolidation, joinder or any other manner, an additional person or entity not a party to this Agreement, except by written consent containing a specific reference to this Agreement signed by the parties hereto and any other person or entity sought to be joined. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent or with a person or entity not named or described therein. The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by the parties to this Agreement shall be specifically enforceable in accordance with applicable law and any court having jurisdiction thereof. (c) The parties to the arbitration shall be entitled to engage in discovery pursuant to the Minnesota Rules of Civil Procedure, Minnesota Rules of Evidence and the Minnesota General Rules of Practice for the District Court. (d) The decision and, if applicable, award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. One arbitrator shall be used unless the parties mutually agree to use a panel of arbitrators. (e) All filing fees and AAA costs associated with the arbitration itself shall be paid for by the party who files the notice of arbitration; provided, however, that all such expenses shall be recovered by the filing party in the event said party prevails. Any issues regarding who is the prevailing party shall be determined by the arbitrator or arbitrators. The prevailing party also shall recover from the non- prevailing party all attorneys' fees and costs, including fees and costs for expert witnesses and fees and costs relating to any challenge or appeal of the arbitration award or confirmation by a court of law. Section 13.3. Authority Representatives Not Individually Liable. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or for any amount which may become due to the 44 Redevel0¢er or successor or on any obligations under the terms of this Agreement, except in the case of willful misconduct. Section 13.4. Equal Employment Opportunity. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements it will comply with all applicable equal employment opportunity and non-discrimination laws, ordinances and regulations. Section 13.5. Restrictions on Use. The Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, rental, use or occupancy of the Redevelopment Property or any part thereof. Section 13.6. Business Subsidy. The parties will comply with all applicable provisions of the Minnesota Business Subsidy Act, including any of the Act's reporting requirements that may be applicable to the Project. Section 13.7. Titles of Articles and Sections. Any titles of the several Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 13.8. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, transmitted by facsimile, delivered by a recognized overnight courier or delivered personally to the address of such party below, or at such other address as a party may, from time to time, designate in writing and forward to the other: If to the Authority: With a copy to: Housing and Redevelopment Authority 5341 Maywood Rd Mound, MN 55364 Attn: Executive Director Kennedy & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 Attn: John B. Dean, Esq. If to the Redeveloper: Mound Harbor Renaissance Development, LLC 1521 94a~ Lane NE Minneapolis, MN 55449 Attn: David Newman, Chief Manager With copies to: Thomas A. Stokes 4052 Oakland St St. Bonifacius, MN 55375 Plum Investment Company 700 East Lake St, Suite 201 Wayzata, MN 55391 Attn: Peter Pflaum, President 45 Key Property Development Company, LLC 225 6th St, Suite 5200 Minneapolis, MN 55402 Attn: Jerry Paquin, President Krass Monroe, P.A. 8000 Norman Center Dr, Suite 1000 Minneapolis, MN 55437 Attn: James R. Casserly, Esq. Section 13.9. Memorandum of Contract. Upon request of a Party, the other Party agrees to execute a Memorandum of Contract which may be recorded for purposes of giving record notice of the rights and obligations contained herein. Section 13.10. Counterparts. This agreement may be executed in any number of counterparts, which counterparts shall together constitute one and the same instrument. 46 ARTICLE XIV TERMINATION OF AGREEMENT Section 14.1. Termination. The Authority may terminate this Agreement as provided herein, and otherwise this Agreement shall terminate upon payment of the Tax Increment Notes in accordance with their terms and the discharge of all of the Authority's and Redeveloper's respective obligations hereunder. Section 14.2. Sections to Survive Termination. The following shall survive termination of this Agreement: (a) Any indenmification or other rights or remedies arising hereunder due to any Event of Default which occurred prior to such termination, and (b) The Declaration of Protective Covenants and Prohibition Against Tax Exemption. Section 14.3. Termination as to Individual Phase. If: (i) it is determined by a court of competent jurisdiction that this Agreement, or any action contemplated under this Agreement is void due to the existence of an impermissible conflict of interest of any member of the Authority or the City with respect to any Phase; or (ii) upon the mutual agreement of the parties if a claim of such conflict is made, the Phase with respect to which the conflict relates shall be removed from this Agreement, and all the provisions, terms and conditions of this Agreement will be thereby modified as if such removed Phase were never a part of this Agreement. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf by its duly authorized representatives, and the Redeveloper has caused this Agreement to be duly executed in its name and behalf by its duly authorized representative, on or as of the date of first above written. G:\WPDATA\MhMOUND HARBOR RENAISSANCE LLC\01 \DOC\REDEV AGREEMENT V 10.DOC (signature pages follow) 47 Dated: ,2005 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA By Its By Its 48 Dated: ,2005 MOUND HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company By Its 49 EXHIBIT A DESCRIPTION OF REDEVELOPMENT PROPERTY Area I PID I A0dress I Owner I Current Use LOST LAKE 13-1t7-24-33-0069 Unassigned City Vacant 13-117-24-34-0063 5377 Shoreline Dr Balboa Minnesota Co. (Maxwell) Vacant 13-117-24-34-0075 Unassigned Balboa Minnesota Co. (Maxwell) Vacant AUDITORS 13-117-24-33-0004 5567 Shoreline Dr Beckel Westonka Travel & Tan RO,~LD 13-I 17-24-33-0005 5555 Shoreline Dr Moy House of Moy, Xtreme Contractors 13-117-24-33-0006 5545 Shoreline Dr Johnson Positive Promotions, Kirby Vacuum 13-117-24-33-0009 5519 Shoreline Dr Metropolitan Transit Vacant / ROW Commission 13-117-24-33-0010 Unassigned City Vacant / ROW / greenway 13-117-24-33-0011 5501 Shoreline Dr City Vacant / ROW / greenway 13-117-24-33-0012 Unassigned City Vacant / ROW / greenway 13-117-24-33-0013 Unassigned City Vacant / ROW / greenway 13-117-24-33-0014 5575 Shoreline Dr Perbix Carpet Man (gone?), locksmith 13-117-24-33-0015 5581 Shoreline Dr Lauer Dentist, Fine impressions Photo Studio 13-117-24-33-0016 2300 Commerce Blvd HRA Vacant 13-117-24-33-0017 2306 Commerce Blvd HRA Vacant / dilapidated 13-117-24-33-0019 Unassigned City Vacant / ROW / greenway 13-117-24-33-0047 2316 Commerce Blvd Larson Larson Printing 13-117-24-33-0048 Unassigned City Vacant / parking lot I3-117-24-33-0049 5579 Auditors Rd City Vacant / ROW 13-117-24-33-0050 2334 Commerce Blvd City Vacant / ROW 13-117-24-33-0051 2348 Commerce Blvd City Vacant / ROW / greenway 13-117-24-33-0076 5533 Shoreline Dr HRA Glass Plus 13-117-24-33-0083 2290 Commerce Blvd Crow River State Bank Bank 13-117-24-33-0090 Unassigned City Park & Ride / Farmer's Market No PID# Auditor #1 Unassigned County ROW - CR 15 No PID# Auditor #2 Unassigned City ROW - Marian Lane No PID# Auditor #3 Unassigned City ROW - Alley LANGDON 14-1 t7-24-44-0001 2321 Commerce Blvd PTS Holdings Inc. ProFix LAKE 14-117-24-44-0002 2339 Commerce Blvd Meisel : Old Bank Bldg 14-117-24-44-0003 2365 Commerce Blvd Meisel Styles by Diarme, Westonka Dental, Byers Chiro, Sm~ Cont., The Laker & Pioneer, Kromer Co., Minnetonka Paint 14-117-24-44-0004 2345 Commerce Blvd Koenig & Schwert II D & L Cleaning, 3's Company Hair, Wiser Ins., Westonka Tan 14-117-24-44-0006 Unassigned Meisel Vacant 14-117-24-44-0040 Unassigned City ROW 14-117-24-44-0041 2301 Commerce Blvd Westonka Professional J. Dickenson / Susan McGraw DDS Center (Johnson) 14-117-24-44-0042 2313 Commerce Blvd Netka H & R Block 14-117-24-44-0043 Unassigned Meisel Vacant 14-117-24-44-0044 Unassigned Meisel Vacant 50 Area [ PID I Address I Owner { Current Use LANGDON 14-117-24.44-0045 Unassigned Meisel Vacant LAKE 14-117-24-44-0046 Unassigned Meisel Vacant (cont.) 14-117-24-44-0047 Unassigned Meisel Vacant 14-117-24-44-0048 Unassigned Meisel ' Vacant 14-117-24-44-0049 Unassigned Meisel Vacant 14-117-24-44-0050 Unassigned Meisel Vacant 14-117-24-44-0051 Unassigned Meisel Vacant 14-117-24-44-0056 Unassigned City Vacant 14-117-24-44-0057 Unassigned City Vacant / shoreline 14-117-24-44-0060 Unassigned Meisel Vacant I4-117-24-44-0061 Unassigned Meisel Vacant 14-117-24-44-0062 Unassigned City (County tax forfeit) Vacant / marsh No PID# Unassigned City Juniper Rd and alleys No PID# Unassigned City Juniper Rd and alleys 51 EXHIBIT B SITE PLAN 52 l~!gttllllT C CERTIFICATE OF COMPLETION WHEREAS, the Housing and Redevelopment Authority in and for the City of Mound, Minnesota, a body corporate and politic (the "Authority") and Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company (the "Redeveloper"), have entered into a Contract for Private Redevelopment (the "Agreement") dated ,2005, regarding certain real property located in a tax increment financing district in the City (hereinafter referred to and referred to in the Agreement as the "Redevelopment Property"); and WHEREAS, the Agreement contains certain conditions and provisions requiring the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred to and referred to in the Agreement as the "Minimum Improvements"); and WHEREAS, Section 5.4 of the Agreement requires the Authority to provide an appropriate instrument promptly after the substantial completion (as defined in the Agreement) of the Minimum Improvements so certifying said substantial completion; NOW, THEREFORE, in compliance with said Section 5.4 of the Agreement, this is to certify that the Redeveloper has substantially completed the Minimum Improvements in accordance with the conditions and provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), and this certification shall be a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. 53 Dated: ,2005 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA By Its By Its STATE OF MINNESOTA ) )ss COUNTY OF HENNEPIN ) On this __ day of , 2005, before me, a notary public within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the and , respectively, of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public 54 I~ItI~IT B REVENUE NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA LIMITED REVENUE TAX INCREMENT NOTE ., 200__ Housing and Redevelopment Authority in and for the City of Mound, Minnesota (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Mound Harbor Renaissance Development, LLC (the "Owner"), solely from the source, to the extent and in the manner hereinafter provided, the principal amount of this Note, being Dollars ($ ) (the "Principal Amount"), together with interest on the unpaid principal balance from the date of this Note until paid at the rate of Percent ( %) per annum and payable on the dates described below (the "Payment Dates") and in the amounts as hereinafter defined (the "Payments"). This Note is issued pursuant to that certain Contract for Private Redevelopment by and between the Authority and the Owner dated ,2005 (as amended, modified, supplemented or restated from time to time, the "Agreement"). This Note is subject to the terms, conditions and provisions of the Agreement. Capitalized terms in this Note not defined herein shall have the definitions given those terms in the Agreement. The Payment Dates shall commence on August 1 of the first year of receipt of Tax Increment from the construction of the Minimum Improvements and on each February 1 and August 1 thereafter until and including December 31, 20 unless earlier paid in accordance with the terms of this Note. All Payments made by the Authority on this Note shall be applied first to accrued interest and then to principal. Any accrued interest on this Note not paid on any Payment Date shall be added on such Payment Date to the principal amount of this Note. The Principal Amount is subject to prepayment at the option of the Authority in whole or in part at any time without penalty. Each Payment on this Note is payable in any coin or currency of the United States of America which on the date of such Payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in financing a 55 project, as therein defined, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Mound Harbor Project Area. THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY OR THE STATE OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN TAX INCREMENT, AS DEFINED BELOW. The Payment of this Note due on any Payment Date is payable solely from and only t6 the extent that the Authority shall have received as of such Payment Date Tax Increment, as defined in the Agreement. In the event that Tax Increment is not sufficient to pay when due the principal of and interest on this Note, the failure of the Authority to pay the principal of and interest on this Note then due shall not constitute a default hereunder. The Authority shall pay on each Payment Date to the Owner the Tax Increment. On December 31, 20 , the maturity date of this Note, any unpaid portion shall be deemed to have been paid in full. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds, except the Tax Increment, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note, shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. The Authority makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Agreement the Authority elects to terminate the Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Agreement for a fuller statement of the obligations of the Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby incorporated by reference into this Note to the same extent as though set out in full herein. The execution and delivery of this Note by the Authority, and the acceptance thereof by the Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this Note as the "Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and deliver the same to the Redeveloper) under the Agreement. IT IS HEREBY CERTWIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other 56 indebtedness of the Authority outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota, by its Commission Members, has caused this Note to be executed by the manual signatures of the and the of the Authority and has caused this Note to be dated ,200 HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA By Its By Its 57 CERTIYlCATE OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued on the __ day of , 200__, was on said date registered in the name of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota, a public body corporate and politic and that, at the request of said Registered Owner of this Note, the undersigned has this day registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. Name of Date of Signature of Registered Owner Registration Secretary Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company ., 200__ 58 PUBLIC IMPROVEMENTS To be constructed by Redeveloper except as indicated below: · Utility relocation · Sanitary sewer · Water mains and stubs · Storm sewers and storm water system elements (ponds, pipes, infiltration system) both on and off site · Underground utilities · The Parking Ramp · Reconnection of Auditors Road to County Road 15 · Trails and other pedestrian improvements within the Greenway (to be constructed by the City) · Any other publicly-owned trails and other pedestrian improvements pursuant to City-approved site plans · Streetscape, including sidewalks, lighting, landscaping and pedestrian furniture (all or a portion of which will be constructed by the City) 59 EXHIBIT F SITE IMPROVEMENTS Building demolition Site clearance Landscaping and screening according to City-approved landscape plans Privately-owned trails and other pedestrian improvements pursuant to City-approved site plans Grading and import/export of soil in accordance with City-approved grading plans Retaining walls and fences Private streets, including curb and gutter Docks and dredging (classify as Minimum Improvements if private property) 60 EXHIBIT G DESCRIPTION OF MINIMUM IMPROVEMENTS Description of Phase Minimum Improvements Lost Lake · 12,500 sq. ft. office/retail * 17 lakefront townhomes · 20 lakeview townhomes Auditors Road · 49,100 sq. ft. office/retail · 55 market rate condos (Does not include Minimum Improvements for former "hotel site," which are to be determined pursuant to Section 6.6(a)(2).) Langdon Lake · 18,375 sq. ft. office/retail · 55 senior condos · 78 market rate condos · 5 lakefront townhomes 61 EXHIBIT H DECLARATION OF RESTRICTIVE COVENANTS AND PROHIBITION AGAINST TAX EXEMPTION This Declaration is made and executed as of the __ day of ., 200__ by Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company ("Declarant"). RECITALS A. Declarant is fee owner of the premises located in the County of Hennepin, State of Minnesota described on Exhibit A attached hereto (the "Property"). B. The Housing and Redevelopment Authority in and for the City of Mound, Minnesota, a public body corporate and politic (the "Authority") has entered into a Contract for Private Redevelopment dated ,2005 with the Declarant (the "Redevelopment Agreement"). The Redevelopment Agreement provides for certain assistance, financial and otherwise, to be provided by the Authority in connection with the construction of townhomes by the Declarant on the Property. NOW, THEREFORE, in consideration of the foregoing, Declarant, for itself and its successors and assigns, does hereby declare that the Property shall be owned, used, occupied, sold and conveyed subject to the following covenants and restrictions: 1. No part of the Property shall become tax exempt from the levy of ad valorem property taxes, or any statutorily authorized alternative, until December 31, 20 2. The covenants and restrictions herein contained shall run with the title to the Property and shall be binding upon all present and future owners and occupants of the Property; provided, however, that the covenants and restrictions herein contained shall inure only to the benefit of the Authority and may be released or waived in whole or in part at any time, and from time to time, by the sole act of the Authority, and variances may be granted to the covenants and restrictions herein contained by the sole act of the Authority. These covenants and restrictions shall be enforceable only by the Authority, and only the Authority shall have the right to sue for and obtain an injunction, prohibitive or mandatory, to prevent the breach of the covenants and restrictions herein contained, or to enforce the performance or observance thereof. 20 3. The covenants and restrictions herein contained shall remain in effect until December 31, and thereafter shall be null and void. 4. If any one or more of the covenants or restrictions contained in this Declaration are held to be invalid or enforceable, the same shall in no way affect any of the other provisions of this Declaration, which shall remain in full force and effect. 62 MOUND HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company By Its: STATE OF MINNESOTA ) )ss COUNTY OF ) On this __ day of ,2005, before me, a notary public within and for County, personally appeared , to me personally known and who by me duly sworn, did say that he is the of Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public 63 EXHIBIT I PARCELS IN 110 SOUTH Area I PID I Address I Owner I Current Use 110 SOUTH 13-117-24-33-0052 2360 Commerce BIvd Netka Apartment bldg (18 units) 13-117-24-33-0020 2360 Commerce BIvd Netka Vacant/dock 13-117-24-33-0082 2372 Commerce BIvd Lodge #320 Masonic Lodge 13-117-24-33-0055 2380 Commerce Blvd Ryan Residential house - rental 13-117-24-33-0056 2388 Commerce BIvd Whalen Residential house - rental 13-117-24-33-0057 2396 Commerce Blvd Williams Trustee Commercial bldg 24-117-24-22-0013 2400 Commerce Blvd Falness Residential house - rental 64 EXHIBIT J PRO FORMA 65 EXHIBIT K ELIGIBLE PROJECT COSTS Redevelopment Property acquisition costs Public Improvements which have not been specially assessed Site Improvements 66 EXHIBIT L REDEVELOPMENT PROPERTY DEED THIS INDENTURE, made this __ day of , 20 between the City of Mound, Minnesota, a public body corporate and politic (the "Grantor"), and Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, the receipt whereof is hereby acknowledged, does hereby convey and quit claim to the Grantee, its successors and assigns forever, all the tract or parcel of land lying and being in the County of Hennepin and State of Minnesota described as follows: See Exhibit 1 Attached together with all hereditaments and appurtenances belonging thereto. NOTICE: THE INTEREST CONVEYED HEREBY IS SUBJECT TO A DECLARATION OF RESTRICTIVE COVENANTS AND PROHIBITION AGA/NST TAX EXEMPTION DATED AS OF , 200__ RECORDED IN THE LAND RECORDS OF HENNEPIN COUNTY, MINNESOTA. 67 IN WITNESS WHEREOF, the Grantor has caused this deed to be duly executed in its behalf as of the date first written above. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA By Its By Its STATE OF MINNESOTA ) )ss COUNTY OF HENNEPIN ) On this __ day of .... before me, a notary public within and for Hennepin County, personally appeared and to me personally known who by me duly sworn, did say that they are the and , respectively, of the Housing and Redevelopment Authority in and for the City of Mound, Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. This instrument was drafted by: Krass Monroe, P.A. 8000 Norman Center Drive, Suite 1000 Minneapolis, MN 55437 Gay Greiter, Esq. Notary Public Tax Statements for the real property described in this instrument sent to (include name and address of Grantee): Mound Harbor Renaissance Development, LLC 1521 94th Lane NE Minneapolis, MN 55449 68 EXHIBIT M MAXWELL MORTGAGE MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT This MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, AND SECURITY AGREEMENT (the "Mortgage"), made this __ day of ., 2005, between MOUND HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company with an address at 1521 - 94a* Lane NE, Minneapolis, Minnesota 55449 (the "Mortgagor") and the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA, a public body corporate and politic having its principal office at 5342 Maywood Road, Mound, Minnesota 55364 (the "Mortgagee"), WITNESSETH' To secure the obligation of the Mortgagor to pay up to FIVE HUNDRED THOUSAND DOLLARS ($500,000), pursuant to the Tax Deficiency Guarantee referred to in Section 8.3 of that certain Contract for Private Redevelopment (the "Redevelopment Agreement") dated as of , 2005 by and between the Mortgagor and Mortgagee: Mortgage. Mortgagor hereby mortgages to Mortgagee the tract of land lying in the County of Ramsey, State of Minnesota, legally described in Exhibit 1 attached hereto and incorporated herein by reference, together with all tenements, easements, hereditaments, privileges, minerals and mineral rights, water and water rights, buildings, fixtures and improvements now or hereafter erected or located on the above described land (hereinafter referred to as the "mortgaged premises"). Assignment of Leases and Rents. Mortgagor hereby assigns to Mortgagee all leases now or hereafter affecting the mortgaged premises and all rents and profits due or to become due with respect to the mortgaged premises, whether before or after foreclosure or during any redemption period after foreclosure sale, as additional security for the payment of the Tax Deficiency Guarantee, and Mortgagor hereby further agrees that Mortgagee shall have the power pursuant to this Assignment of Leases and Rents irrevocably to manage, control and lease the mortgaged premises. Upon the occurrence of an Event of Default hereunder and without regard to waste, adequacy of the security, or solvency of the Mortgagor, Mortgagee may, at its option, either: (a) Apply to the Minnesota District Court for the County wherein the mortgaged premises is located for the appointment of a receiver under M.S. Section 559.17, it being understood and agreed that Mortgagee shall be entitled to the appointment of a receiver upon a showing that an Event of Default has occurred under the terms of this Mortgage. A receiver so appointed shall apply all rents and profits collected from the date of his or her appointment through the redemption period from any foreclosure sale, first as provided in M.S. Section 576.01, subdivision 2, and thereafter shall apply the rents and profits to the payment of the following items in the order indicated: first, to the payment of principal and interest on any prior mortgages; second, to the payment of any other prior liens or encumbrances; and third to the payment of the Tax Deficiency Guarantee; or 69 (b) Collect all rents and profits from the occupiers of the mortgaged premises upon the filing by Mortgagee, in the office of the County Recorder or, in the case of registered property, in the office of the Registrar of Titles, for the County in which the mortgaged premises is located, of a notice of the occurrence of an Event of Default in the terms and conditions of this Mortgage and the service of said notice of default upon the occupiers of the mortgaged premises. From the date of filing and service upon the occupiers of notice of default through the redemption period from any foreclosure sale, Mortgagee shall apply all rents and profits so collected in the same manner as is provided in subparagraph (a) above where the rents and profits are collected pursuant to the appointment of a receiver. In the event Mortgagee exercises its rights under this subparagraph (b), it shall not, solely by reason thereof, be deemed to be a mortgagee-in-possession of the mortgaged premises. Securi _ty Agreement. Mortgagor hereby grants to Mortgagee a security interest in all building materials, equipment, fixtures, furniture and furnishings (including, but not limited to, all engines, boilers, elevators, machinery, heating apparatus, electrical equipment, air conditioning equipment, water and gas fixtures, plumbing, communication devices, stoves, refrigerators, carpeting, shades, awnings, screens, storm sashes and blinds) now or hereafter located or intended to be located on the mortgaged premises of whatsoever type or nature, whether now owned or hereafter acquired by Mortgagor, including all replacements, repairs and substitutions thereto and proceeds thereof. Mortgagor hereby covenants and agrees that upon the occurrence of an Event of Default hereunder, Mortgagee may, in addition to any other remedy provided for herein or which it may have at law or equity, exercise all rights granted to it under the Minnesota Uniform Commercial Code, M.S. Chapter 336. The filing of this Mortgage shall constitute the filing of a financing statement in the office wherein it is filed and a photographic or other reproduction of this document may also be filed as a financing statement. Fixture Financing Statement. The filing of this Mortgage shall constitute a filing of a financing statement in the office wherein it is filed and a photographic or other reproduction of this document may also be filed as a financing statement. Name and Address of Debtor: Mound Harbor Renaissance Development, LLC 1521 94th Lane NE Minneapolis, MN 55449 Attention: David Newman, Chief Manager Name and Address of Secured Party: Housing and Redevelopment Authority in and for the City of Mound, Minnesota 5341 Maywood Road Mound, MN 55364 Attention: Executive Director Description of the types (or items) of property covered by this financing statement: All building materials, equipment, fixtures, furniture and furnishings (including, but not limited to all engines, boilers, elevators, machinery, heating apparatus, electrical equipment, air conditioning equipment, water and gas fixtures, plumbing, communication devices, stoves, refrigerators, carpeting, shades, awnings, screens, storm sashes, and blinds) now or hereafter located or intended to be located on the Mortgaged Premises of 70 whatsoever type or nature, whether now owned or hereafter acquired by Mortgagor, including all replacements, repairs and substitutions thereto and proceeds thereof. Description of real estate to which all or part of the collateral is attached or upon which it is located: See Exhibit 1 attached hereto. 1. Statutory_ Covenants. Mortgagor makes and includes in this Mortgage the statutory covenants and other provisions set forth in M.S. Section 507.15 or in any future Minnesota statute providing for a statutory form of real estate mortgage and the Mortgagor covenants with Mortgagee the following statutory covenants: (a) To warrant the title to the mortgaged premises upon acquisition of title to various parcels thereof under Section 4.2 of the Redevelopment Agreement. (b) To pay the indebtedness as herein provided. (c) To pay all taxes. (d) To keep all buildings insured against fire for an amount not less than the full replacement cost and against other hazards for the amounts specified by Mortgagee for the protection of Mortgagee, including, but not limited to, lightning, hazards under the usual extended coverage endorsement, and all other hazards and risks of. direct physical loss occasioned by any cause whatsoever, subject only to the exceptions and exclusions, if any, agreed to by Mortgagee. All such policies shall name Mortgagee as loss payee under the so-called standard mortgage clause, contain no pro rata reduction provisions and provide for not less than thirty (30) days notice to Mortgagee of cancellation of said policy. (e) The mortgaged premises shall be kept in repair and no waste shall be committed. (f) At the option of Mortgagee, that the whole of the principal sum shall become due upon the occurrence of an Event of Default as set forth below. 2. Events of Default/Acceleration of Maturity. Mortgagor agrees that at the option of Mortgagee and in addition to Mortgagee's right to accelerate the maturity of the indebtedness secured hereby as set forth above in the statutory covenants, the entire remaining principal balance plus accrued interest shall become due and payable in full upon the occurrence of any of the following (each of which is herein referred to as an "Event of Default"): (a) when due; or Failure by Mortgagor to make any payment on the Tax Deficiency Guarantee (b) contained herein; Default by Mortgagor in the performance of any other covenants or agreements provided, that Mortgagee will not exercise its remedies under this Mortgage unless the Mortgagor fails to cure the default within thirty (30) days after Mortgagee has given the Mortgagor written notice of the Event of Default; provided, however, that no notice is required to be given to the Mortgagor by the 71 Mortgagee on or after the occurrence of one of the events described in Section 12.1(d)(i) or (iv) of the Redevelopment Agreement. 3. Statutory Power of Sale, Waiver and Agreement. At maturity, whether at the stated time or prior thereto by the acceleration of maturity pursuant hereto, Mortgagee (in addition to any other remedies provided for herein or which it may have at law or equity) shall have the statutory power of sale, and on foreclosure may retain statutory costs and attorneys' fees. 4. Foreclosure; Receiver. Mortgagor hereby expressly consents to the foreclosure and sale of the mortgaged premises by action pursuant to M.S. Chapter 581 or, at the option of Mortgagee, by advertisement pursuant to M.S. Chapter 580, which provides for sale after service of notice thereof upon the occupant of the mortgaged premises and publication of said notice for six weeks in the County in Minnesota where the mortgaged premises is situated; acknowledges that service need not be made upon Mortgagor personally (unless Mortgagor is an occupant) and that no hearing of any type is required in connection with the sale; and, except as may be provided in said statutes, expressly waives any and all right to prior notice of sale of the mortgaged premises and any and all rights to a prior hearing of any type in connection with the sale of the mortgaged premises. 5. Miscellaneous. This Mortgage shall be governed by and construed in accordance with the laws of the State of Minnesota and shall inure to the benefit of Mortgagee, its successors and assigns. In the event any provision hereof is determined to be unenforceable or invalid, such provision of such part thereof as may be unenforceable or invalid shall be deemed severed from this Mortgage and the remaining provisions carried out with the same force and effect as if the severed provisions or part thereof had not been made a part hereof. 6. Effectiveness of Lien. The Mortgagor and Mortgagee acknowledge that as of the date hereof the Mortgagor does not have title to the mortgaged premises but intends to acquire such title as provided in Section 4.2 of the Redevelopment Agreement and that the lien created by this Mortgage only arises as, if, when and to the extent the Mortgagor so acquires title to the mortgaged premises. MOUND HARBOR RENAISSANCE DEVELOPMENT, LLC, a Minnesota limited liability company By Its STATE OF MINNESOTA ) ) ss COUNTY OF ) On this __ day of ., 2005, before me, a notary public within and for County, personally appeared ., to me personally known and who by me duly sworn, did say that he is the of Mound Harbor Renaissance Development, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public 72 EXHIBIT lq CITY FEE SCHEDULE BUILDING AND CONSTRUCTION Building Permit: 300.20 Wrecking permit: Minor building $50 Minor building to be replaced on same site $50 Single family wood frame $150 Duplex $200 Multiple dwelling: 1 st two units $200 Each addn'l unit $250 Total cost of wrecking at $6 for each $500 or fraction thereof of the market value of such work. Gas burners: not exceeding 99,999 BTU $10 100,000 - 199,999 BTU $15 200,000 - 399,999 BTU $30 400,000 - 599,999 BTU $44 600,000 - 999,999 BTU $60 Install/remove flammable & combustible liquids and LP tanks: Tank not buried enclosed-500 gals. or less $10 Tank not buried enclosed - over 500 gals. $15 Tank buried or enclosed $25 Removal of combustible/flammable liquid tank $15 Removal of storage tanks of above/below ground liquor $15 gas See 1997 UBC,Sect. 107,Table ;30.20 Building Permits 1-A+surch. Fire suppression Same as above Inspection fees Same as above Plan check fees Same as above EXCAVATION & LAND RECLAMATION 460.15 Grading plan review fees: *50 cu yards or less $0 '51-100 cu yards $15 *101-1,000 cu yards $22 * 1,001-10,000 cu yards $30 * 10,001-100,000 cu yards: 73 First 10,000 cu yards $30 Additional for ea 10,000 cu yards or fraction thereof $15 * 100,001-200,000 cu yards: First 100,000 cu yards $165 Additional for ea 10,000 cu yards or fraction thereof $9 '200,001 or more: First 200,000 cu yards $255 Additional for ea 10,000 cu yards or fraction thereof $4.50 Additional plan review, due to changes, additions, or $30 revisions to approve plans: per hour (min. 1/2 hour) Grading Permit Fees: *50 cu yards or less $15 *51-100 cu yards $22 * 101-1,000 cu yards: First 1,000 cu yards $22.50 Additional for ea 100 cu yards or fraction thereof $10.50 * 1,001-10,000 cu yards: First 1,000 cu yards $117 Additional for ea 100 cu yards or fraction thereof $9 * 10,001-100,000 cu yards: First 1,000 cu yards $198 Additional for ea 100 cu yards or fraction thereof $22.50 After hours inspection: Minimum charge 2 hours $30/hr. Re-inspection fees assessed under Provision of Chapter 305(g) (UBC) $30/yr. Inspection for which no fee is specified Minimum 1/2 hour ~ $30/hr. Difference between original Fee for authorizing additional grading under valid permit: and entire project 505.15 Street Excavation: Unpaved street $100+$500 deposit Macadam $100+$500 deposit Concrete or bade $100+$500 deposit LAND USE ADMINISTRATION FEES: (Staff reports, meetings, etc.) Property file research - admin, fee (non-owners) $15 Building permit deposit (to cover staff review time - non- pickups): Minor projects (value less than $1,000) $100 Major projects (value more than $1,000) $500 Land Use application fee - city staff: 1-3 hours N/C More than 3 hours $30/hr. Unauthorized construction/no permit issued Double building permit fee 74 §UBBIVI§ION & ZONINC l~[[§: 330.12 Waiver of Platting fee $200 Waiver of Platting escrow $500 350.475 Fence Permit $55 350.530 Zoning variance $200 Variance escrow $500 350.525 Conditional Use Permit $350 CUP escrow $500 350.755 Vacation $350 350.1100 Wetlands Permit $350 350.520 Zoning Amendment $350 Rezoning escrow $500 Planned Unit Development $1,700 Site Plan Review $350 Commercial Site Plan review escrow $500 Preliminary Plat $350 + $15/lot Final Plat $350 + $15/lot Minor Subdivision - Lot split $250 Per lot over 2 lots $15 Park Dedication Fee $1,100 or 10% Escrow deposit - small project app. $1,000 Escrow deposit - large project app. $5,000 365.05 Sign Permit $100 Sign alteration fee: Structural alter'n, up to the 1st $1,000 $50 Temporary sign permit $25 192.00 Containers in right-of-way $50 i193.00 Portable Storage Container $50 C UTILITIES: Water: Water Trunk Area Charge (WTAC) $1,500 per unit 610.45 Water Service Connection Fee $240/unit Sewer: 600.45 Sewer Availability Charge (SAC) $1,200/unit (passes through to Met Council Envir. Serv.) Sewer Trunk Area Charge (STAC) $1,500/unit Sewer Service Connection Fee $240/unit 75 HRA RESOLUTION NO. RESOLUTION APPROVING THE REDEVELOPMENT PLAN FOR THE MOUND HARBOR PROJECT AREA WHEREAS, pursuant to the Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act") the Authority has proposed to adopt a Redevelopment Plan for the Mound Harbor Project Area (the "Proj ect Area"), and WHEREAS, the Authority has caused to be prepared the Redevelopment Plan, and has requested the written opinion of the Planning Commission of the City, and WHEREAS, pursuant to such request, the Planning Commission did, on March 8, 2005, render its written opinion that the Redevelopment Plan conforms with the general plans for the development and redevelopment of the City as described in the comprehensive plan for the City; and WHEREAS, the Authority did, on or about January 25, 2005, determined that a redevelopment project should be undertaken and directed that a request be made for the City Council to hold a public hearing on the proposed Redevelopment Plan, all in accordance with the HRA Act, and WHEREAS, by such request the Authority also requested that the Mound Planning Commission consider the proposed Redevelopment Plan and provide its written opinion as to conformity of the proposed Redevelopment Plan with the Comprehensive Plan; and WHEREAS, following consideration of the request, the Planning Commission did, on March 7, 2005 adopt its resolution making such finding; and WHEREAS, the Authority has included in its application to the City Council the materials required in Minnesota Statutes, Section 469.028 subdivision 1, and WHEREAS, the City Council did on March 22, 2005 based on such reference and following notice as required by law, hold its hearing on the approval of the modifications to the Redevelopment Plan, and did approve the proposed Redevelopment Plan NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Mound, Minnesota as follows: I. The Authority makes the following findings: the land in the project area would not be made available for redevelopment without the financial aid to be sought; JBD-260603vl MU195-15 -96- II. the redevelopment plan for the project area w~]} afforct maximum oppommity, consistent with the needs of the locality as a whole, for the redevelopment of the area by private enterprise; and the redevelopment plan conforms to a general plan for the development of the locality as a whole; and based on the information contained in Exhibit A and information presented at the heating and otherwise known to the council, the Project Area is blighted within the meaning of Minnesota Statutes, Sections 469.002 and 469.028. The Authority hereby approves the Redevelopment Plan, and makes all of the findings stated therein. Adopted by The Housing and Redevelopment Authority in and for the City of Mound, Minnesota this 22ndth day of March, 2002. Chair ATTEST: Executive Director :ii JBD-260603vl MU195-15 -97- EXHIBIT A Analysis of Blight Conditions Mound Harbor Project Area [Incorporated from Hoisington Koegler Group, Inc. Report] Statutory Definition of Blighted Area "Blighted area (contains) buildings or improvements which by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light, and sanitary facilities, excessive land coverage, deleterious land use, or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community." 1. Dilapidation The residential and commercial properties were constructed between 1905 and 2000. Even though these properties, as well as the existing commercial and residential improvements constructed on them, can be considered old, they are not considered to have any historical value nor architectural merit. Old properties, however, require relatively higher levels of maintenance and repair. Over half of these properties can be considered to be lacking in needed maintenance and repair. The criterion of "dilapidation" was observed to apply to forty-three (43) of the sixty (60) parcels within the project planning area. Twelve (12) of parcels exhibited "strong" evidence of this criterion while another thirty-one (31) parcels exhibited "moderate" evidence. ao Deferred maintenance of structures and site improvements. Buildings and paved surfaces in disrepair Deferred Maintenance: Specific evidence of deferred maintenance includes: · Poorly maintained exterior building surfaces including masonry, stucco, wood clapboard and metal siding. · Back yard areas overgrown with vegetation. JBD-260603vl MU195-15 -98- Cracked, ruttecl pavecl sur~'aces. Roof system in a failing condition Foundation cracks, settling or heaving Windows & Doors: cracked, broken, ajar or boarded up. Excluding eleven (11) parcels that have become part of the Auditors Road Street Right-of-Way or are "undevelopable" lake or wetlands, seventy-two 72% of these properties (43 of 60 parcels) exhibit a deferred maintenance pattern. In addition, individual owners would be reluctant to make the required level of investments to their individual properties, given the context of the deteriorating nature of adjacent and nearby properties. Building and paved surfaces in disrepair: Specific evidence of buildings and paved surfaces in disrepair includes: · Masonry surfaces broken and in need of tuck-pointing. · Broken windows · Windows and Doors ajar and inoperable. · Entry stairways and service/loading docks broken and failing. · Cracked, broken and crumbling paved surfaces. The twelve (12) properties exhibiting moderate to strong evidence of"dilapidation" include a wide variety of building surfaces and site improvements in a state of significant disrepair. The obvious dilapidation of each of commercial properties and residential properties represent a clear blighting influence on abutting properties. In addition, the problems with windows, doors, building surfaces and pavement negatively impact the current use and future prospects for these properties. 2. Obsolescence/Obsolete Layout The criteria of "obsolescence" and "obsolete layout" were observed to apply to seven (7) parcels within the project planning area, all of which five (5) exhibited "strong" evidence of these criteria and two (2) additional parcels exhibited "moderate" evidence. ao Dysfunctional layout of buildings and parking. Substandard design of alley. Dated appearance of structures. Dysfimctional layout of building and parking: All seven commercial parcels are without adequate or convenient parking for customers or visitors based on the layout of the building at zero front lot line. Four of the seven had no available on-site parking. Three of the seven had limited parking which was below current standards. In addition, parking and loading/service areas are not segregated or clearly identified. Substandard design of alley: The alleys on Shoreline Blvd. and Commerce Blvd. commercial properties are long (generally over 100 feet) and narrow. This presents problems to easy and convenient site access and is a psychological barrier to access the front of the business if on-street parking stalls are full. Overall the alleys JBD~260603vl MU195-15 -99- represent an inconvenient and potentially unsafe site access for the majority of parcels within the project planning area Outdated appearance of structures: There is very little evidence of regular maintenance, updating or major rehabilitation is evident on the exteriors of any of theses structures. In the commercial core at Commerce and Shoreline Blvd. there has been only $360,000.00 of property investment over the past 15 years. Most of this investment, as indicated by building permit data, is for non-structural improvements. As stated in Paragraph 1 (Dilapidation), these buildings "are not considered to have any historical value nor architectural merit," and they in fact tend to serve as remnants from a past era that are not consistent with contemporary needs and preferences of retail and commercial service uses. 3. Faulty arrangement or design The criterion of "faulty arrangement or design" was obserVed to apply to twelve (12) parcels within the project planning area. Nine (9) of parcels exhibited "strong" evidence of this criterion while another three (3) parcels exhibited "moderate" evidence. Inadequate parking. Inconvenient pedestrian and vehicular access. Substandard alley. Inadequate Parking: Eight (8) commercial properties utilize narrow alleys for site access. This results in a poorly functioning, obsolete parking and loading service area. The lack of legal parking in front of the properties, due to the fact that these properties front onto a City-owned right-of-way which is not used for street purposes, compounds the parking and loading deficiencies. This situation produces a blighting influence to surrounding properties, as commercial tenants' employees, suppliers, and customers seek out nearby parking opportunities Inconvenient pedestrian and vehicular access: The awkward and confusing parking arrangement in the rear of buildings along Shoreline and Commerce Boulevards creates safety hazards for pedestrians trying to access the front doors. The ill-defined narrow alley offers no separation between cars and pedestrians seeking to access to the commercial uses. It is likely to present a particularly undesirable site condition in winter months during conditions of snow and ice. The substandard design of the alley that serves as the primary access for the majority of parcels in the project planning area (see paragraph 2. Dilapidation) also serves as a clear representation of this criterion. Substandard alley. See Paragraph 2 (Dilapidation) and Paragraph 5 (Other Factors). 4. Excessive Land Coverage JBD-260603vl MUl95-15 -100- The criterion of "faulty arrangement or design" was observed to apply to eighteen (18) parcels within the project planning area. Ten (10) of parcels exhibited "strong" evidence of this criterion while one (1) additional parcel exhibited "moderate" evidence. a. Size and placement of commercial buildings. Size and placement of commercial buildings: Twenty-four (24) of the sixty (60) parcels exhibit this criterion due to their nonconforming lot size. Twenty-eight (28) of the sixty (60) buildings exhibit this criterion due to their relative the amount of remaining site area available for parking, loading, and access. As referenced in Paragraph 3 (Faulty Design and Arrangements), the placement of the commercial buildings at a zero-front-setback exacerbates the problem of excessive land coverage because the principal access points to the buildings are opposite the parking areas, making for difficult pedestrian connections. 5. Other Factors In addition to the above, the following other blighting factors were evident: ao Negative conditions within public fights-of-way. Overgrown vegetation. Economics o f renewal/reinvestment. Negative conditions within the public rights-of-way: · The substandard design of the alley serving commercial and residential properties. · The obsolete design of the parking areas. The above referenced conditions within public right-of-way represent a blighting influence the impacts the entire project planning area. Vehicular and pedestrian access is compromised by the substandard and antiquated arrangement of driveway cuts, paved surfaces, parking and driveways serving the majority of parcels. bo Overgrown Vegetation: Overgrown vegetation present on many of the parcels representing a blighting influence consistent with the intent of the statutory definition for a blight area. Co Economics of renewal/reinvestment: In addition, the physical and economic difficulties associated with lot-by-lot, or building-by-building, renewal of these 60 properties lead to the conclusion that this type and form of reinvestment is unlikely to occur. A renewal/reinvestment scenario that would take the form of total redevelopment appears more likely, more desired, and more feasible in terms of producing property design/layout and land use mix that would be market-sensitive and would contribute to the near-term and future health and welfare of the Mound Harbor Project Area. Note: The full report and field data are on file in the office of Mound Community Development Director JBD-260603vl MU195-15 -101 - JBD-260603vl MU195-15 -102- Draft as of March 18, 2005 REDEVELOPMENT PLAN FOR MOUND HARBOR PROJECT AREA HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND, MINNESOTA Adopted: ,, 2005 JBD-259593vl MU195-15 -103- I. DEFINITIONS The terms defined below have, for purposes of this Redevelopment Plan, the meanings herein specified, unless the context specifically requires otherwise: "Authority" means the Housing and Redevelopment Authority in and for the City of Mound, Minnesota. "Bond" means any tax-exempt or taxable bonds issued by the City or Authority to finance the Public Redevelopment Costs, and any obligations issued to refund such bonds. "City" means the City of Mound, Minnesota. "City Council" means the City Council of the City. "County" means Hennepin County, Minnesota. "HRA Act" means Minnesota Statutes, Sections 469.001 to 469.047. "Project" means the Mound Harbor Redevelopment Project, the boundaries of which are generally described in Exhibit A and generally illustrated in the map attached as Exhibit B. "Project Area" means the area within the boundaries of the Project as shown in Exhibits A and B. "Public Redevelopment Costs" means all legally permissible costs incurred or to be incurred by or on behalf of the Authority in carrying out the Redevelopment Plan, including but not limited to: (a) the costs of any redevelopment activities consistent with the Redevelopment Plan as originally adopted or subsequently amended; (b) costs of administering the Project; and (c) debt service payments on any obligations issued to finance Public Costs authorized by the Redevelopment Plan. "Redevelopment Plan" means this Redevelopment Plan for the Project as it may be amended or supplemented fi:om time to time. "State" means the State of Minnesota. "Tax Increment Financing District" or "TIF District" means any tax increment financing district that may be established under the TIF Act within the Project. "Tax Increment Financing Act" or "TI:F Act" means Minnesota Statutes, Sections 469.174 through 469.179, as amended and supplemented fi:om time to time. "Tax Increment Financing Plan" means the Tax Increment Financing Plan for any Tax Increment Financing District. "Tax Increments" District. JBD-259593vl MU195-15 means the tax increments derived from any Tax Increment Financing -104- II. STATEMENT OF NEED AND PUBLIC PURPOSE The Authority finds that there is a need for redevelopment within the City and the Project Area to remedy blight and blighting conditions, prevent the emergence of blight, promote the health, safety and welfare of City residents, encourage related development and redevelopment in order to protect, improve the tax base and general economic vitality of the City, and assure that the long term housing needs of the City are met. The Authority specifically finds that: (a) the land within the Project Area would not be available for redevelopment without the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Project by private enterprise; and (c) that the Redevelopment Plan conforms to the general plan for the development of the City as a whole. The Authority further finds that the Project is a "redevelopment project" within the meaning of Minnesota Statutes, Section 469.001, subd. 16 of the HRA Act. The factual basis for the above findings includes: The City has conducted several studies of the Project Area, including the Mound Visions Concept Plan (1991), the Mound Environmental and Appearance Model (1992), the Mound Comprehensive Plan (2000), the 2000 Mound Zoning Ordinance Amendment Project (2000) and the Mound Visions Areawide Alternative Review (2005). These studies, including the findings made therein, are incorporated here by reference. The Hoisington Koegler Group, Inc., together with city planning staff have conducted an inventory study of the current condition of properties within the Project Area. The study reports evidence of obsolescence, land use incompatibilities, poor parcel and building configuration, and hazardous traffic conditions for vehicles and pedestrians. A summary of the findings are found in the attached Exhibit C. In late 2004 and early 2005, LHB, Inc. ("LHB") conducted a study of building conditions in a portion of the Project Area. That study determined that a substantial percentage of the buildings in the area are structurally substandard as defined in Minnesota Statutes, Section 469.174, subd. 10. Such findings contribute to the conclusion that the Project Area is a "blighted area" within the meaning of Section 469.002, subdivision 11 of the HRA Act. Data from the LHB Study are on file with the Authority. These study results will also be used when considering the establishment of future tax increment financing districts. The City's Comprehensive Plan, as adopted on April 11, 2000, identified the comprehensive downtown redevelopment project as the public's highest priority regarding commercial land use in the City. JBD-259593vl MU195-15 -105- Bo Background of Mound Visions Redevelopment Program. The City conanitted itself to revitalizing its downtown efforts through an effort called "Mound Visions." Mound Visions began in 1991 when the City began to explore ways to strengthen its downtown business community. For some time, the downtown struggled to realize its full potential, not because of the efforts of private businesses, but largely due to the lack of image, connectivity, and pedestrian appeal. Many of the elements so important to the area, such as natural amenities and pedestrian comfort had been forgotten. Early efforts focused on general beautification, fagade improvements and limited streetscape improvements. Through this exercise, the community learned it needed much more than aesthetics for a successful downtown. Mound Visions incorporates a comprehensive approach to planning, design and implementation projects that will involve both public and private entities. Mound Harbor Renaissance Plan. The proposed Mound Harbor Renaissance (MHR)project will be the heart of the Mound Visions Plan for downtown revitalization. The original plan established five new downtown mixed-use districts and since that time, two have essentially been completed. The Mound Harbor Renaissance (MHR) project will complete the three remaining districts including Lost Lake, Auditor's Road, and Lake Langdon and will rebuild downtown as a mixed-use, pedestrian friendly environment which is oriented towards Mound's greatest natural asset, Lost Lake, and its historic channel which extends to Lake Minnetonka. Project goals include: · Establishing a traditional downtown by creating a distinctive community place for Mound. Creating a central core of traditional, multi-story "main street" type buildings with retail along the street and office or housing uses located above. · Keeping the downtown vital by mixing retail, entertainment and office uses with a wide range of lifecycle housing. Offering the community new housing choices including senior cooperative apartments, urban "rowhouse style townhomes" and loft or apartment- style condominiums. · Connecting the downtown area with new greenways, trails and traditionally designed streets and sidewalks. · Incorporating streetscape and landscaping elements along the new mainstreet and realigned CSAH 15 corridor. · Providing central, downtown parking areas including both structured and surface lots. JBD-259593vl MU195-15 -106- Enhancing community appreciation of and access to, the area's natural resources by reclaiming the historic Lost Lake channel and providing public dock and boat slip amenities for both residents and visitors. Projecting and enhancing the City's natural resources through the incorporation of innovative and unique stormwater strategies. Planning for regional transportation connections including the existing rail corridor being planned for as a possible future LRT route and a new transit shelter to be incorporated into the Park and Ride facility currently proposed for the True Value District. Planning Strategies. Redevelopment of the City's downtown area is a recurrent theme in the approved comprehensive plan which was adopted by the City of Mound on April 11, 2000. In anticipation of the proposed downtown redevelopment project, a number of planning-related efforts have been undertaken by the City including the Mound Environmental and Appearance Model which was adopted in 1992. This document was based on the Mound Market Position which was adopted by the City of Mound on 1991. Additionally, the Mound Zoning Ordinance was amended in 2000 to incorporate new regulations and standards for the Pedestrian, Destination, and Linear Districts which were created to guide the City's "new" downtown. Mound Harbor Renaissance Plan Review Sketch Plan. The sketch plan for the Mound Harbor Renaissance proposal was formally reviewed the Mound Planning Commission and City Council in August and September 2004 respectively. While the sketch plan for the Mound Harbor Renaissance project does not include the South CSAH 110 corridor, it is important to mention that redevelopment of this corridor is anticipated and therefore has been included in the Project Area. A copy of the approved sketch plan of the Mound Harbor Renaissance proposal is included as Exhibit D. AUAR. Preparation of the Mound Visions Areawide Alternative Urban Review (AUAR) commenced in June 2004. The Mound Visions Final A UAR and Mitigation Platt was approved by the Mound City Council on January 25, 2005. Related Projects The City was awarded a stormwater initiatives grant from the Twin Cities Metropolitan Council in October 2003 for the downtown project. JBD-259593vl MU195-15 -107- Environmental investigation grants for the Lost Lake District, Tree Value District and Auditor's Road Districts were awarded to the City of Mound by Hennepin County Environmental Services and the Minnesota Pollution Control Authority (MPCA) in 2002 and 2004. A $1.5M levy was approved for the Minnehaha Creek Watershed District (MCWD) to undertake stormwater improvements associated with the downtown Mound redevelopment project. The levy will be funded over a 3 year period and includes unique and innovative strategies and programs as outlined in the MCWD report entitled "Supplementing Mound Downtown Redevelopment with Innovative Stormwater Management." According to the report, "The purpose of the MCWD participation in the redevelopment is to incorporate stormwater management practices that reach as far as possible and incorporate as many new ideas as needed to improve the quality of runoff reaching Lake Minnetonka via Lost Lake and Lake Langdon." The City of Mound was awarded a $1.2M Livable Communities development grant from the Twin Cities Metropolitan Council to fund public parking in the Auditor's Road District in February 2005. At its March 9, 2005 meeting, the Lake Minnetonka Conservation District (LMCD) Board of Managers approved the City of Mound multiple dock license and variance application(s) to allow (37) slips for the Lost Lake townhome project (subject to conditions.) The City of Mound submitted the dredge and aquatics permit applications for the Lost Lake townhome project to the Minnehaha Creek Watershed District (MCWD) and the Department of Natural Resources on February 3, 2005. It is anticipated that the City's dredge permit application will be reviewed by the MCWD Board of Managers on April 7TM. III. STATUTORY AUTHORITY The Authority is authorized under the HRA Act to undertake and administer the Redevelopment Plan and the Project, and to finance Public Redevelopment Costs through issuance of bonds secured by Project revenues. IV. STATEMENT OF OBJECTIVES The Authority seeks to accomplish the following general objectives within the Redevelopment Project: JBD-259593vl MU195-15 -108- Promote the prompt development and redevelopment of property within the Project Area in a manner consistent with the City comprehensive plan and the Mound Visions Plan and the Concept Plan, which property is currently less productive because of substandard conditions, lack of adequate community services, or general blight. B. Promote the development of adequate public facilities necessary to serve the Project Area and the City as whole. Promote the concentration of residential and appropriate commercial development within the Project area in order to maintain the area in a manner compatible with its prominence in the City. Construct, acquire or finance any public facilities, including sanitary sewer, water, storm drainage and roads, deemed necessary and desirable for the development or redevelopment of the Project area. Assist in development or redevelopment through provision of public services, environmental remediation, soil and terrain corrections or site improvements, or land acquisition, all in cases deemed appropriate by the Authority. F. Employ any powers of the Authority under the HRA Act for the benefit of the Project in such cases and upon such terms as the Authority may deem appropriate. G. Promote the development and redevelopment of multifamily housing in the community. V. PROJECT AREA The Project bom~dahes are described in Exhibit A and are illustrated in the map attached as Exhibit B. VI. PROPERTY ACQUISITION The Authority may acquire any property within the Project Area as identified in Exhibit B, or interests therein, as the Authority may deem necessary or desirable to carry out the objectives of the Redevelopment Plan. Acquisition may be accomplished by negotiation or by the exercise of the Authority's powers of eminent domain. VII. REDEVELOPMENT PROJECT FINANCING The 'Authority may establish one or more TIY Districts in the Project to finance Public Redevelopment Costs. The Authority may also use any other revenues available to the Authority to pay such costs, including without limitation grant funds, property tax abatements through the City under Minnesota Statutes, Sections 469.1812 to 469.1815, and proceeds of a special tax, if any, levied under Section 469.033 of the HRA Act. JBD-259593vl MU195-15 -109- JBD-259593vl MU195-15 EXHIBIT A Description of Project Area MOUND HARBOR PROJECT AREA (AS REVISED MARCH, 2005) 13-117-24-33-0004 5567 SHORELINE DR 13-117-24-33-0005 5555 SHORELINE DR 13-117-24-33-0006 5545 SHORELINE DR 13-117-24-33-0009 5519 SHORELINE DR 13-117-24-33-0010 ADDRESS UNASSIGNED 13-117-24-33-0011 5501 SHORELINE DR 13-117-24-33-0012 ADDRESS UNASSIGNED 13-117-24-33-0013 ADDRESS UNASSIGNED 13-117-24-33-0014 5575 SHORELINE DR 13-117-24-33-0015 5581 SHORELINE DR 13-117-24-33-0016 2300 COMMERCE BLVD 13-117-24-33-0017 2306 COMMERCE BLVD 13-117-24-33-0019 ADDRESS UNASSIGNED 13-117-24-33-0020 2362 COMMERCE BLVD 13-117-24-33-0047 2316 COMMERCE BLVD 13-117-24-33-0048 ADDRESS UNASSIGNED 13-117-24-33-0049 5579 AUDITOR'S RD 13-117-24-33-0050 2334 COMMERCE BLVD 13-117-24-33-0051 2348 COMMERCE BLVD 13-117-24-33-0052 2360 COMMERCE BLVD 13-117-24-33-0055 2380 COMMERCE BLVD 13-117-24-33-0056 2388 COMMERCE BLVD 13-117-24-33-0057 2396 COMMERCE BLVD 13-117-24-33-0069 ADDRESS UNASSIGNED 13-117-24-33-0076 5533 SHORELINE DR 13-117-24-33-0082 2372 COMMERCE BLVD 13-117-24-33-0083 2290 COMMERCE BLVD 13-117-24-33-0090 ADDRESS UNASSIGNED 13-117-24-34-0063 5377 SHORLINE DR 13-117-24-34-0075 ADDRESS UNASSIGNED 14-117-24-44-0001 2321 COMMERCE BLVD 14-117-24-44-0002 2339 COMMERCE BLVD 14-117-24-44-0003 2365 COMMERCE BLVD 14-117-24-44-0004 2345 COMMERCE BLVD 14-117-24-44-0006 ADDRESS UNASSIGNED 14-117-24-44-0041 2301 COMMERCE BLVD 14-117-24-44-0042 2313 COMMERCE BLVD 14-117-24-44-0043 ADDRESS UNASSIGNED -110- 14-117-24-44-0044 ADDRESS UNASSIGNED 14-117-24-44-0045 ADDRESS UNASSIGNED 14-117-24-44-0046 ADDRESS UNASSIGNED 14-117-24-44-0047 ADDRESS UNASSIGNED 14-117-24-44-0048 ADDRESS UNASSIGNED 14-117-24-44-0049 ADDRESS UNASSIGNED 14-117-24-44-0050 ADDRESS UNASSIGNED 14-117-24-44-0051 ADDRESS UNASSIGNED 14-117-24-44-0056 ADDRESS UNASSIGNED 14-117-24-44-0057 ADDRESS UNASSIGNED 14-117-24-44-0060 ADDRESS UNASSIGNED 14-117-24-44-0061 ADDRESS UNASSIGNED 14-117-24-44-0062 ADDRESS UNASSIGNED 23-117-24-11-0001 2434 COMMERCE BLVD 23-117-24-11-0002 2426 COMMERCE BLVD 23-117-24-11-0003 2444 COMMERCE BLVD 23-117-24-11-0004 2462 COMMERCE BLVD 23-117-24-11-0005 2480 COMMERCE BLVD 23-117-24-11-0006 2500 COMMERCE BLVD 23-117-24-11-0009 2544 COMMERCE BLVD 23-117-24-11-0010 2558 COMMERCE BLVD 23-117-24-11-0027 2510 COMMERCE BLVD 23-117-24-11-0028 ADDRESS UNASSIGNED 23-117-24-11-0033 2590 COMMERCE BLVD 23-117-24-14-0007 2630 COMMERCE BLVD 23-117-24-14-0008 2642 COMMERCE BLVD 23-117-24-14-0043 2606 COMMERCE BLVD 23-117-24-14-0044 5668 BARTLETT BLVD 23-117-24-14-0050 2620 COMMERCE BLVD 23-117-24-14-0138 2590 COMMERCE BLVD 23-117-24-14-0139 5680 BARTLETT BLVD 24-117-24-22-0001 2420 COMMERCE BLVD 24-117-24-22-0013 2400 COMMERCE BLVD C JBD-259593vl MU195-15 -111- EXHIBIT B Map of Project Area JBD-259593vl MUl95-15 -112- -113- EXHIBIT C HKGI Blight Assessment Summary Report for the Mound Harbor Project Area JBD-259593vl MU195-15 -114- Analysis of Blight Conditions Mound Harbor Project Area [Incorporated from Hoisington Koegler Group, Inc. Report] Statutory Definition of Blighted Area "Blighted area (contains) buildings or improvements which by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light, and sanitary facilities, excessive land coverage, deleterious land use, or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community." 1. Dilapidation The residential and commercial properties were constructed between 1905 and 2000. Even though these properties, as well as the existing commercial and residential improvements constructed on them, can be considered old, they are not considered to have any historical value nor architectural merit. Old properties, however, require relatively higher levels of maintenance and repair. Over half of these properties can be considered to be lacking in needed maintenance and repair. The criterion of "dilapidation" was observed to apply to forty-three (43) of the sixty (60) parcels within the project planning area. Twelve (12) of parcels exhibited "strong" evidence of this criterion while another thirty-one (31) parcels exhibited "moderate" evidence. ao Deferred maintenance of structures and site improvements. Buildings and paved surfaces in disrepair Deferred Maintenance: Specific evidence of deferred maintenance includes: · Poorly maintained exterior building surfaces including masonry, stucco, wood clapboard and metal siding. · Back yard areas overgrown with vegetation. · Cracked, rutted paved surfaces. · Roof system in a failing condition · Foundation cracks, settling or heaving · Windows & Doors: cracked, broken, ajar or boarded up. Excluding eleven (11) parcels that have become part of the Auditors Road Street Right-of-Way or are "undevelopable" lake or wetlands, seventy-two 72% of these properties (43 of 60 parcels) exhibit a deferred maintenance pattern. In addition, individual owners would be reluctant to make the required level of investments to their individual properties, given the context of the deteriorating nature of adjacent and nearby properties. Building and paved surfaces in disrepair: Specific evidence of buildings and paved surfaces in disrepair includes: -115- · · · · · Masonry surfaces broken and in need of tuck-pointing. Broken windows Windows and Doors ajar and inoperable. Entry stairways and service/loading docks broken and failing. Cracked, broken and crumbling paved surfaces. The twelve (12) properties exhibiting moderate to strong evidence of"dilapidation" include a wide variety of building surfaces and site improvements in a state of significant disrepair. The obvious dilapidation of each of commercial properties and residential properties represent a clear blighting influence on abutting properties. In addition, the problems with windows, doors, building surfaces and pavement negatively impact the current use and future prospects for these properties. 2. Obsolescence/Obsolete Layout The criteria of "obsolescence" and "obsolete layout" were observed to apply to seven (7) parcels within the project planning area, all of which five (5) exhibited "strong" evidence of these criteria and two (2) additional parcels exhibited "moderate" evidence. ao Dysfunctional layout of buildings and parking. Substandard design of alley. Dated appearance of structures. Dysfunctional layout of building and parking: All seven commercial parcels are without adequate or convenient parking for customers or visitors based on the layout of the building at zero front lot line. Four of the seven had no available on-site parking. Three of the seven had limited parking which was below current standards. In addition, parking and loading/service areas are not segregated or clearly identified. Substandard design of alley: The alleys on Shoreline Blvd. and Commerce Blvd. commercial properties are long (generally over 100 feet) and narrow. This presents problems to easy and convenient site access and is a psychological barrier to access the front of the business if on-street parking stalls are full. Overall the alleys represent an inconvenient and potentially unsafe site access for the majority of parcels within the project planning area Outdated appearance of structures: There is very little evidence of regular maintenance, updating or major rehabilitation is evident on the exteriors of any of theses structures. In the commercial core at Commerce and Shoreline Blvd. there has been only $360,000.00 of property investment over the past 15 years. Most of this investment, as indicated by building permit data, is for non-structural improvements. As stated in Paragraph 1 (Dilapidation), these buildings "are not considered to have any historical value nor architectural merit," and they in fact tend to serve as remnants from a past era that are not consistent with contemporary needs and preferences of retail and commercial service uses. -116- 3. Faulty arrangement or design The criterion of"faulty arrangement or design" was observed to apply to twelve (12) parcels within the project planning area. Nine (9) of parcels exhibited "strong" evidence of this criterion while another three (3) parcels exhibited "moderate" evidence. Inadequate parking. Inconvenient pedestrian and vehicular access. Substandard alley. Inadequate Parking: Eight (8) commercial properties utilize narrow alleys for site access. This results in a poorly functioning, obsolete parking and loading service area. The lack of legal parking in front of the properties, due to the fact that these properties front onto a City-owned right-of-way which is not used for street purposes, compounds the parking and loading deficiencies. This situation produces a blighting influence to surrounding properties, as commercial tenants' employees, suppliers, and customers seek out nearby parking opportunities Inconvenient pedestrian and vehicular access: The awkward and confusing parking arrangement in the rear of buildings along Shoreline and Commerce Boulevards creates safety hazards for pedestrians trying to access the front doors. The ill-defined narrow alley offers no separation between cars and pedestrians seeking to access to the commercial uses. It is likely to present a particularly undesirable site condition in winter months during conditions of snow and ice. The substandard design of the alley that serves as the primary access for the majority of parcels in the project planning area (see paragraph 2. Dilapidation) also serves as a clear representation of this criterion. Substandard alley. See Paragraph 2 (Dilapidation) and Paragraph 5 (Other Factors). 4. Excessive Land Coverage The criterion of "faulty arrangement or design" was observed to apply to eighteen (18) parcels within the project planning area. Ten (10) of parcels exhibited "strong" evidence of this criterion while one (1) additional parcel exhibited "moderate" evidence. a. Size and placement of commercial buildings. Size and placement of commercial buildings: Twenty-four (24) of the sixty (60) parcels exhibit this criterion due to their nonconforming lot size. Twenty-eight (28) of the sixty (60) buildings exhibit this criterion due to their relative the amount of remaining site area available for parking, loading, and access. As referenced in Paragraph 3 (Faulty Design and Arrangements), the placement of the commercial buildings at a zero-front-setback exacerbates the problem of excessive land coverage -117- because the principal access points to the buildings are opposite the parking areas, making for difficult pedestrian connections. 5. Other Factors In addition to the above, the following other blighting factors were evident: Negative conditions within public rights-of-way. Overgrown vegetation. Economics o f renewal/reinvestment. mo Negative conditions within the public fights-of-way: · The substandard design of the alley serving commercial and residential properties. · The obsolete design of the parking areas. The above referenced conditions within public right-of-way represent a blighting influence the impacts the entire project Planning area. Vehicular and pedestrian access is compromised by the substandard and antiquated arrangement of driveway cuts, paved surfaces, parking and driveways serving the majority of parcels. Overgrown Vegetation: Overgrown vegetation present on many of the parcels representing a blighting influence consistent with the intent of the statutory definition for a blight area. Economics of renewal/reinvestment: In addition, the physical and economic difficulties associated with lot-by-lot, or building-by-building, renewal of these 60 properties lead to the conclusion that this type and form of reinvestment is unlikely to occur. A renewal/reinvestment scenario that would take the form of total redevelopment appears more likely, more desired, and more feasible in terms of producing property design/layout and land use mix that would be market-sensitive and would contribute to the near-term and future health and welfare of the Mound Harbor Project Area. -118- C EXHIBIT D Mound Harbor Renaissance Sketch Plan (July 2004) C JBD-259593vl MU195-15 -119- -120- Cf' -121 - HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND CITY OF MOUND COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. RESOLUTION MODIFYING THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT DISTRICT NO 1-2 BY THE ELIMINATION OF PARCELS FROM TAX INCREMENT FINANCING DISTRICT NO. 1-2; ESTABLISHING THE MOUND HARBOR TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Housing and Redevelopment Authority in and for the City of Mound (the "HRA") and the City of Mound (the "City") that the HRA adopt a Redevelopment Plan for the Mound Harbor Project Area (the "Redevelopment Plan"), eliminate parcels from Tax Increment Financing District No. 1-2 and establish the Mound Harbor Tax Increment Financing District and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (collectively the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, sections 469.001 to 469.047, and sections 469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and WHEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the Plans. The HRA has also requested the City Planning Commission to provide for review of and written comment on the Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law; and WHEREAS, following notice as required by law, the City Planning Commission provided the HRA with its review of the Plan and the Modification; and WHEREAS, following notice as required by law the City Council held its public hearing and adopted Resolution No. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The HRA hereby finds that the Mound Harbor Tax Increment Financing District is in the public interest and is a "redevelopment district" under Minnesota Statutes, section 469.174, Subd. 10 (a)(1), and finds that the adoption of the proposed Plans conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is already built up and that the adoption of the proposed Plans will help provide employment opportunities in the State and in the preservation and enhancement of the tax base of the City and the State because it will discourage commerce and industry from moving their operations to another state or municipality and thereby serves a public purpose. 2. The HRA further finds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the project area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments -v0n -122- financially feasible. 3. The HRA hereby approves the Modification of the Tax Increment Plan for Tax Increment District no. 1-2 thereby eliminating from said District the parcels causes the elimination of 53 parcels, thereby reducing the size of District No. 1-2. 4. City Council Resolution No.__ is hereby confirmed and ratified by the HRA, and all of the findings contained therein are adopted, confirmed and incorporated in this resolution as if fully recited herein. 5. The Plan and Modification, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the City Clerk. 5. The staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 6. The City Clerk is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175, Subd. 4a. 7. The City Clerk is authorized and directed to forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Mound this __ day of ,2005. ATTEST: Chair Executive Director -v0n -123- MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-2 and the TAX INCREMENT FINANCING PLAN for the establishment of THE MOUND HARBOR TAX INCREMENT FINANCING DISTRICT (a redevelopment district) HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MOUND HENNEPIN COUNTY STATE OF MINNESOTA Public Hearing: March 22, 2005 Adopted: EHLERS ASSOCIATES Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www. ehlers-inc, com -124- TABLE OF CONTENTS (for reference purposes only) SECTION I- Foreword MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-2 ......... 1-1 ............................................................. 1-1 SECTION II - TAX INCREMENT FINANCING PLAN FOR THE MOUND HARBOR TAX INCREMENT FINANCING DISTRICT ........... Subsection 2-1. Foreword ............................................... Subsection 2-2. Subsection 2-3. Subsection 2-4. Subsection 2-5. Subsection 2-6. Subsection 2-7. Subsection 2-8. Subsection 2-9. Subsection 2-10. Subsection 2-11. Subsection 2-12. Subsection 2-13. Subsection 2-14. Subsection 2-15. Statutory Authority ........................................ Statement of Objectives ................................... Redevelopment Plan Overview .............................. Description of Property in the District and Property To Be Acquired Classification of the District ................................. Duration of the District ..................................... Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements .................................... Sources of Revenue/Bonded Indebtedness .................... Uses of Funds ........................................... Fiscal Disparities Election .................................. Business Subsidies ....................................... County Road Costs ....................................... Estimated Impact on Other Taxing Jurisdictions ................. Supporting Documentation ................................. 2-1 2-1 2-1 2-1 2-1 2-2 2-2 2-4 2-4 2-5 2-6 2-7 2-7 2-8 2-8 2-9 Subsection 2-16. Subsection 2-17. Subsection 2-18. Subsection 2-19. Subsection 2-20. Subsection 2-21. Subsection 2-22. Subsection 2-23. Subsection 2-24. Subsection 2-25. Subsection 2-26. Subsection 2-27. Subsection 2-28. Definition of Tax Increment Revenues ....................... 2-10 Modifications to the District ................................ 2-10 Administrative Expenses .................................. 2-11 Limitation of Increment ................................... 2-11 Use of Tax Increment .................................... 2-12 Excess Increments ...................................... 2-13 Requirements for Agreements with the Developer .............. 2-13 Assessment Agreements ................................. 2-14 Administration of the District ............................... 2-14 Annual Disclosure Requirements ........................... 2-14 Reasonable Expectations ................................. 2-14 Other Limitations on the Use of Tax Increment ................. 2-14 Summary .............................................. 2-15 APPENDIX A PROJECT DESCRIPTION ................................................ A-1 APPENDIX B MAP(S) OF THE MOUND HARBOR PROJECT AREA AND THE DISTRICT ......... B-1 APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT ............. C-1 -125- APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT ............................... APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM ............................... APPENDIX F REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT .................... APPENDIX G BUT/FOR QUALIFICATIONS .............................................. APPENDIX H PRIOR IMPROVEMENTS ................................................ D-1 E-1 F-1 G-1 H-1 -126- SECTION I - MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. Foreword (AS MODIFIED ON MARCH 22, 2005) Tax Increment Financing District No. 1-2 was established on December 14, 1999. The District is being modified to eliminate 53 parcels, therefore reducing the size of TIF District No. 1-2. HRA in and for the City of Mound Modification to the Tax Increment Financing Plan for TIF District No. 1-2 1-1 -127- SECTION II - TAX INCREMENT FINANCING PLAN FOR THE MOUND HARBOR TAX INCREMENT FINANCING DISTRICT Subsection 2-1, Foreword The Housing and Redevelopment Authority in and for the City of Mound (the "HRA"), the City of Mound (the "City"), staff and consultants have prepared the following information to expedite the establishment of the Mound Harbor Tax Increment Financing District (the "District"), a redevelopment tax increment financing district, located in the Mound Harbor Project Area. Subsection 2-2. Statutory Authority Within the City, there exists areas where public involvement is necessary to cause development or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("M.S. "), Sections 469.001 to 469.047, inclusive, as amended, and M.S., Sections 469.174 to 469. ! 799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant information is contained in the Redevelopment Plan for the Mound Harbor Project Area. Subsection 2-3. Statement of Objectives The District currently consists of 53 parcels of land and adjacent and internal rights-of-way. The District is being created to facilitate the redevelopment and construction of a mixed-use pedestrian friendly environment in the City. Please see Appendix A for further project information. Contracts for this have not been entered into at the time of preparation of this TIF Plan, but development is likely to occur beginning in the Spring of 2005. This TIF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for the Mound Harbor Project Area. The activities contemplated in the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the HRA or City and is further described in this TIF Plan. 2. Relocation - Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the HRA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The HRA or City may perform or provide for some or all necessary acquisition, construction, relocation, demolition, and required utilities and public street work within the District. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-I -128- Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed in Appendix C. See the map in Appendix B for further information on the location of the District. The HRA or City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the HRA or City only in order to accomplish one or more of the following: storm sewer improvements; provide land for needed public streets, utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to accomplish the uses and objectives set forth in this plan. The HRA or City may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District The HRA and City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469. ! 74 to 469.1799, as amended, inclusive, find that the District, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. JO(a)(1) as defined below: "Redevelopment district" means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more of the following conditions, reasonably distributed throughout the district, exists: parcels consisting of 7O percent of the area in the district are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures and more than 50percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) The property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way; (3) tank facilities, or property whose immediately previous use was for tank facilities, as defined in Section 115C, Subd. 15, if the tank facility: (i) have or had a capacity of more than one million gallons; (ii) are located adjacent to rail facilities; or (iii) have been removed, or are unused, underused, inappropriately used or infrequently used; or (4) a qualifying disaster area, as defined in Subd. lob. For purposes of this subdivision, "structurally substandard" shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. (c) A building is not structurally substandard if it is in compliance with the building code applicable HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-2 -129- to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, if the municipalityfinds that (]) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard. (d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the finding under paragraph (a) if all of the following conditions are met: (1) the parcel was occupied by a substandard building within three years of the filing of the request for certification of the parcel as part of the district with the county auditor; the substandard building was demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority; the authority found by resolution before the demolition or removal that the parcel was occupied by a structurally substandard building and that after demolition and clearance the authority intended to include the parcel within a district; and upon filing the request for certification of the tax capacity of the parcel as part of a district, the authority notifies the county auditor that the original tax capacity of the parcel must be adjusted as provided by 3f 469. ! 77, subdivision i, paragraph (e) For purposes of this subdivision, a parcel is not occupied by buiMings, streets, utilities, paved or gravel parking lots or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures. For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district under paragraph (a) to be included in the district, and the entire area of the district must satisfy paragraph (a). In meeting the statutory criteria the HRA and City rely on the following facts and findings: · · The District is a redevelopment district consisting of 53 parcels. · · An inventory shows that parcels consisting of more than 70 percent of the area in the District are occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures. · · An inspection of the buildings located within the District finds that more than 50 percent of the buildings are structurally substandard as defined in the TIF Act. (See Appendix F). Pursuant to M.S., Sections 469. ! 76 Subd. 7, the District does not contain any parcel or part of a parcel that qualified under the provisions ofM. S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-3 -130- Subsection 2-7. Duration of the District Pursuant to M.S., Seciion 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. lb, the duration of the District will be 25 years after receipt of the first increment by the HRA or City (a total of 26 years of tax increment). The date of receipt by the City of the first tax increment is expected to be 2007. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2032, or when the TIF Plan is satisfied. If increment is received in 2006, the term of the District will be 2031. The HRA or City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to M.S., Section 469. ! 74, Subd. 7 and M. S., Section 469.177, Subd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2004 for taxes payable 2005. Pursuant to M.S., Section 469.177, Sub&. i and 2, the County Auditor shall certify in each year (beginning in the payment year 2007) the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) of the District declines below the ONTC, no value will be captured and no tax increment will be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2005, assuming the request for certification is made before June 30, 2005. The ONTC and the Original Local Tax Rate for the District appear in the table on the following page. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. i, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within the Mound Harbor Project Area, upon completion of the project, will annually approximate tax increment revenues as shown in the table on the following page. The HRA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2007. The Project Tax Capacity (PTC) listed is an estimate of values when the project is completed. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-4 -131 - Project Estimated Tax Capacity upon Completion (PTC) Original Estimated Net Tax Capacity (ONTC) Estimated Captured Tax Capacity (CTC) Original Local Tax Rate Estimated Annual Tax Increment(CTC x Local Tax Rate) Percent Retained by the HRA *PTC is based on the 2009 tax capacity, and does not include inflation. 1,149,407 61,059 1,088,348 1.05738 1,150,797 100% Pay2004 Pursuant to M.S., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found that some building permits have been issued in the past 18 months, but none that should increase the original tax capacity. Please see Appendix H for the building permits that were issued. Subsection 2-9. Sources of Revenue/Bonded Indebtedness Public improvement costs, acquisition, relocation, utilities, parking facilities, streets and sidewalks, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The HRA or City reserves the right to use other sources of revenue legally ap- plicable to the HRA or City and the TIF Plan, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other contribu- tions from the developer and investment income, to pay for the estimated public costs. The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF Plan. As presently proposed, the project will be financed by bond issues and pay-as-you-go notes. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness, including a general obligation (GO) TIF bonds, or other indebtedness related to the use of tax increment financing will not exceed $35,000,000 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that $35,000,000 in bonded indebtedness will be financed with tax increment revenues. This funding may include up to a $5 million General Obligation Tax Increment Bond, for the restoration ora land fill and up to a $5 million General Obligation Tax Increment Bond for the installation of various public improvements. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The HRA or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a developer. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-5 -132- The estimated sources of funds for the District are contained in the table below. SOURCES OF FUNDS TOTAL Tax Increment $35,000,000 PROJECT REVENUES $35?000?000 Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the redevelopment and construction of a mixed-use pedestrian friendly environment. The HRA and City have determined that it will be necessary to provide assistance to the project for certain costs. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF FUNDS TOTAL Land/Building Acquisition Site Improvements/Preparation Public Utilities Parking Facilities Streets and Sidewalks Other Public Improvements Interest Administrative Costs (up to 10%) $7,000,000 $7,000,000 $1,000,000 $500,000 $500,000 $4,000,000 $13,385,405 $1,614,595 PROJECT COSTS TOTAL $357000~000 The above budget is organized according to the Office of State Auditor (OSA) reporting forms. It is estimated that the cost of improvements, including administrative expenses which will be paid or financed with tax increments, will equal $35,000,000 as is presented in the budget above. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of the Mound Harbor Project Area, (including administrative costs, which are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-6 -133- Subsection 2-11. Fiscal Disparities Election Pursuant to M.S., Section 469.177, Subd. 3, the HRA or City may elect one of two methods to calculate fiscal disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause a, (outside the District) are followed, the following method of computation shall apply: The original net tax capacity and the current net tax capacity shall be determined before the application of the fiscal disparity provisions of Chapter 276A or 473F. Where the original net tax capacity is equal to or greater than the current net tax capacity, there is no captured net tax capacity and no tax increment determination. Where the original net tax capacity is less than the current net tax capacity, the difference between the original net tax capacity and the current net tax capacity is the captured net tax capacity. This amount less any portion thereof which the authority has designated, in its tax increment financing plan, to share with the local taxing districts is the retained captured net tax capacity of the authority. The county auditor shall exclude the retained captured net tax capacity of the authority from the net tax capacity of the local taxing districts in determining local taxing district tax rates. The local tax rates so determined are to be extended against the retained captured net tax calgacity of the authority as well as the net tax capacity of the local taxing distri, cts. The tax generated by the extension of the lesser of(A) the local taxing district tax rates or (B) the original local tax rate to the retained captured net tax capacity of the authority is the tax increment of the authority. The HRA will choose to calculate fiscal disparities by clause a. According to M.S., Section 469.177, Subd. 3: The method of computation of tax increment applied to a district pursuant to paragraph (a) or (b) shall remain the same for the duration of the district, except that the governing body may elect to change its election from the method of computation in paragraph (a) to the method in paragraph (b). Subsection 2-12. Business Subsidies Pursuant to M.S. Sections 116~. 993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than $25,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) Redevelopment property polluted by contaminants as defined in M.S., Section ! 16J. 552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-7 -134- (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) (]1) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) The HRA under this Tax reductions resulting from conformity with federal tax law; Workers' compensation and unemployment compensation; Benefits derived from regulation; Indirect benefits derived from assistance to educational institutions; Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; Assistance for a collaboration between a Minnesota higher education institution and a business; Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; General changes in tax increment financing law and other general tax law changes of a principally technical nature. Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; Funds from dock and wharf bonds issued by a seaway port authority; Business loans and loan guarantees of $75,000 or less; and Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. will comply with M.S., Section 116d. 993 to 116J. 994 to the extent the tax increment assistance TIF Plan does not fall under any of the above exemptions. Subsection 2-13. County Road Costs Pursuant to M.S., Section 469.175, Subd. Ia, the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must nOtify the HRA or City within forty- five days of receipt of this TIF Plan. Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the I-IRA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-8 -135- IMPACT ON TAX BASE Estimated Estimated Captured 2004/2005 Tax Capacity (CTC) Percent of CTC Total Net Upon Completion to Entity Total Tax Capacity Hennepin County 1,094,113,489 1,088,348 0.0995% City of Mound 9,210,011 1,088,348 11.8170% ISD No. 277 25,663,191 1,088,348 4.2409% IMPACT ON TAX RATES Estimated Percent 2004/2005 of Total Extension Rates Potential CTC Taxes Hennepin County 0.441140 41.72% 1,088,348 480,114 City of Mound 0.393530 37.22% 1,088,348 428,298 ISD No. 277 0.135130 12.78% 1,088,348 147,068 Other 0.087580 8.28% 1,088,348 95,318 Total 1.057380 100.00% 1,150,797 The estimates listed above display the CTC when all construction is completed. The tax rate used for calculations is the estimated 2004/Pay 2005 rate. The total net capacity for the entities listed above are based on estimated Pay 2005 figures. The District will be certified under the actual 2004/Pay 2005 rates, which were unavailable at the time this TIF Plan was prepared. Subsection 2-15. Supporting Documentation Pursuant to M.S. Section 469.175 Subd 1, clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause (2) and the findings are required in the resolution approving the TIF district. Following is a list of reports and studies on file at the City that support the HRA's findings: · Mound Harbor Renaissance Informal Sketch Plan Review, Hoisington Koegler Group Inc. - June 12, 2003 · Mound Harbor Renaissance Sketch Plan Review, Hoisington Koegler Group Inc. August - 19, 2004 · Mound Harbor Renaissance Sketch Plan Review, Hennepin County - August 30, 2004 · Mound Harbor Renaissance Sketch Plan Review, City of Mound - September 9, 2004 · Major Subdivision Application · Building Code Comments HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-9 -136- C Subsection 2-16. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, purchased by the HRA with tax increments; 3. Principal and interest received on loans or other advances made by the HRA with tax increments; and 4. Interest or other investment earnings on or from tax increments. Subsection 2-17. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4, any: 1. Reduction or enlargement of the geographic ama of the Mound Harbor Project Area or the District, if the reduction does not meet the requirements ofM. S., Section 469. ! 75, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan, or to increase or decrease the amount of interest on the debt to be capitalized; 4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City; 5. Increase in the estimate of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the District; or 6. Designation of additional property to be acquired by the HRA or City, shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S. Section 469. ! 75 Subd. 409, the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the ONTC by the county auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria ofM. S., Section 469.174, Subd. 1 O, paragraph (a), clauses (1) to (5), must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the Mound Harbor Project Area or the District and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding M.S., Section 469.177, Subd. I, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the Mound Harbor Project Area or the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-10 -137- Subsection 2-18. Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City, other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the project; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the project; or 4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued pursuant to M.S., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses (1) to (3). For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any tax increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities' use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-19. Limitation of Increment Pursuant to M.S., Section 469.176, Subd. Ia, no tax increment shall be paid to the HRA or City for the District after three (3) years from the date of certification of the ONTC value of the taxable property in the District by the County Auditor unless within the three (3) year period: (1) Bonds have been issued in aid of the project containing the District pursuant to M.S., Section 469.178, or any other law, except revenue bonds issued pursuant to M.S., Sections 469.152 to 469.165, or (2) The HRA or City has acquired property within the District, or (3) The HRA or City has constructed or caused to be constructed public improvements within the District. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-11 -138- The bonds must be issued, or the HRA or City must acquire property or construct or cause public improvements to be constructed by approximately March, 2008 and report such actions to the County Auditor. The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469. ! 76, Subd. 6: if, afier four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan, no additional tax increment may be taken from that parcel and the original net tax capacity of that parceI shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifih year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening ora new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately March, 2009 and report such actions to the County Auditor. Subsection 2-20. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the CNTC of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. To finance, or otherwise pay public redevelopment costs of the Mound Harbor Project Area pursuant to the M.S., Sections 469.001 to 469.047; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the HRA or City or for the benefit of the Mound Harbor Project Area by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-12 -139- the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469. ! 76, Subd. 4. Tax increments generated in the District will be paid by Hennepin County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for HRA or City administration (up to 10 percent) and the costs of public improvement activities outside the District. Subsection 2-21. Excess Increments Excess increments, as defined in M.S., Section 469. ! 76, Subd. 2, shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. In addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in the Mound Harbor Project Area or the District. Subsection 2-22. Requirements for Agreements with the Developer The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the HRA or City concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the HRA or City should the development or redevelopment not be completed. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-13 -140- Subsection 2-23. Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement. Subsection 2-24. Administration of the District Administration of the District will be handled by the City Clerk. Subsection 2-25. Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subd. 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board, County Auditor and School Board on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469. ! 75 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-26. Reasonable Expectations As required by the TIF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the District permitted by the TIF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such. analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-27. Other Limitations on the Use of Tax Increment General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Mound Harbor Project Area pursuant to the M.S., Sections 469.001 to 469. 04 7. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance ora building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-14 -141 - federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside of the District. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of the District, 75 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation ofredevelopment and renewal and renovation districtsunderM. S., Section 469.176 Subd. 4j. Thesecosts include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary for development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the HRA or City, including the cost of preparation of the development action response plan, may be included in the qualifying costs. Subsection 2-28. Summary The HRA is establishing the District to preserve and enhance the tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113, telephone (651) 697-8500. HRA in and for the City of Mound Tax Increment Financing Plan for the Mound Harbor TIF District 2-15 -142- APPENDIX A PROJECT DESCRIPTION Proiect History The City committed itself to revitalizing its downtown efforts through an effort called "Mound Visions." Mound Visions began in 1991 when the City began to explore ways to strengthen its downtown business community. For some time, the downtown struggled to realize its full potential, not because of the efforts of private businesses, but largely due to the lack of image, connectivity, and pedestrian appeal. Many of the elements so important to the area, such as natural amenities and pedestrian comfort had been forgotten. Early efforts focused on general beautification, facade improvements and limited streetscape improvements. Through this exercise, the community learned it needed much more than aesthetics for a successful downtown. Mound Visions incorporates a comprehensive approach to planning, design and implementation projects that will involve both public and private entities. The proposed Mound Harbor Renaissance project will be the heart of the Mound Visions Plan for downtown revitalization. The original plan established five n. ew downtown mixed-use districts and since that time, two have essentially been completed. The Mound Harbor Renaissance (MHR) project will complete the three remaining districts including Lost Lake, Auditor's Road, and Lake Langdon and will rebuild downtown as a mixed-use, pedestrian friendly environment which is oriented towards Mound's greatest natural asset, Lost Lake, and its historic channel which extends to Lake Minnetonka. Project goals include: Establishing a traditional downtown by creating a distinctive community place for Mound. Creating a central core of traditional, multi-story "main street" type buildings with retail along the street and office or housing uses located above. Keeping the downtown vital by mixing retail, entertainment and office uses with a wide range of life- cycle housing. Offering the community new housing choices including senior cooperative apartments, urban "rowhouse style townhomes" and loft or apartment-style condominiums. Connecting the downtown area with new greenways, trails and traditionally designed streets and sidewalks. Incorporating streetscape and landscaping elements along the new mainstreet and realigned CSAH 15 corridor. Providing central, downtown parking areas including both structured and surface lots. Enhancing community appreciation of and access to, the area's natural resources by reclaiming the historic Lost Lake channel and providing public dock and boat slip amenities for both residents and visitors. Projecting and enhancing the City's natural resources through the incorporation of innovative and unique stormwater strategies. Planning for regional transportation connections including the existing rail corridor being planned for as a possible future LRT route and a new transit shelter to be incorporated into the Park and Ride facility currently proposed for the True Value District. A-1 -143- Planning Strategies Redevelopment of the City's downtown area is a recurrent theme in the approved comprehensive plan which was adopted by the City of Mound on April 11, 2000. In anticipation of the proposed downtown redevelopment project, a number of planning-related efforts have been undertaken by the City including the preparation of the Mound Environmental and Appearance Model which was adopted in 1992. This document was based on the Mound Market Position which was adopted by the City of Mound on 1991. Additionally, the Mound Zoning Ordinance was amended in 2000 to incorporate new regulations and standards for the Pedestrian, Destination, and Linear Districts which were created to guide the City's "new" downtown. Mound Harbor Renaissance Plan Review Sketch Plan. The sketch plan for the Mound Harbor Renaissance proposal was formally reviewed by the Mound Planning Commission and City Council in August and September 2004 respectively. While the approved sketch plan for the Mound Harbor Renaissance project does not include the South CSAH 110 corridor, it is important to mention that redevelopment of this corridor is anticipated. AUAR. Preparation of the Mound Visions Areawide Alternative Urban Review (AUAR) commenced in June 2004. The Mound Visions Final AUAR and Mitigation Plan was approved by the Mound City Council on January 25, 2005. Related Projects The City was awarded a stormwater initiatives grant from the Twin Cities Metropolitan Council in October 2003. Environmental investigation grants for the Lost Lake District, True Value District and Auditor's Road Districts were awarded to the City of Mound by Hennepin County Environmental Services and the Minnesota Pollution Control Authority (MPCA) in 2002 and 2004. A $1.5M levy was approved for the Minnehaha Creek Watershed District (MCWD) to undertake stormwater improvements associated with the downtown Mound redevelopment project. The levy will be funded over a 3 year period and includes unique and innovative strategies and programs as outlined in the MCWD report entitled "Supplementing Mound Downtown Redevelopment with Innovative Stormwater Management." According to the report, "The purpose of the MCWD participation in the redevelopment is to incorporate stormwater management practices that reach as far as possible and incorporate as many new ideas as needed to improve the quality of runoff reaching Lake Minnetonka via Lost Lake and Lake Langdon." The City of Mound was awarded a $1.2M Livable Communities development grant from the Twin Cities Metropolitan Council to fund public parking in the Auditor's Road District in February 2005. The Lake Minnetonka Conservation District (LMCD) Board of Managers directed LMCD staff to prepare findings of fact and order approving the City of Mound multiple dock license and variance application to allow (37) slips for the Lost Lake townhome project (subject to conditions) on February 23, 2005. Final approval is anticipated on March 9th. The City of Mound submitted the dredge and aquatics permit applications for the Lost Lake townhome project to the Minnehaha Creek Watershed District (MCWD) and the Department of Natural Resources on February 3, 2005. It is anticipated that the dredge application will be reviewed by the MCWD Board of Managers on March 24th. A-2 -144- APPENDIX B MAP(S) OF THE MOUND HARBOR PROJECT AREA AND THE DISTRICT B-1 -145- -146- -147- -148- C APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcel(s) listed below. *Parcel Numbers Address Owner 13-117-24-33-0069 N/A City 13-117-24-34-0063 5377 Shoreline Balboa Minnesota Co Drive 13-117-24-34-0075 N/A Balboa Minnesota Co 14-117-24-44-0001 2321 Commerce PTS Holdings Inc Blvd 14-117-24-44-0002 2339 Commerce A P Meisel & P A Meisel Blvd 14-117-24-44-0003 2365 Commerce A P Meisel & P A Meisel Blvd 14-117-24-44-0004 2345 Commerce Koenig & Schwert II Blvd 14-117-24-44-0006 N/A A P Meisel & P A Meisel 14-117-24-44-0040 N/A City 14-117-24-44-0041 2301 Cormnerce Westonka Professional Ctr Blvd 14-117-24-44-0042 2313 Commerce W R Netka & D E Netka et al Blvd 14-117-24-44-0043 N/A A P Meisel & P A Meisel 14-117-24-44-0044 N/A A P Meisel & P A Meisel 14-117-24-44-0045 N/A A P Meisel & P A Meisel 14-117-24-44-0046 N/A A P Meisel & P A Meisel 14-117-24-44-0047 N/A A P Meisel & P A Meisel 14-117-24-44-0048 N/A A P Meisel & P A Meisel 14-117-24-44-0049 N/A A P Meisel & P A Meisel 14-117-24-44-0050 N/A A P Meisel & P A Meisel 14-117-24-44-0051 N/A A P Meisel & P A Meisel 14-117-24-44-0056 N/A City 14-117-24-44-0057 N/A City 14-117-24-44-0060 N/A A P Meisel & P A Meisel 14-117-24-44-0061 N/A A P Meisel & P A MeiseI 14-117-24-44-0062 N/A Hennepin Forfeited Land 13-117-24-33-0004 5567 Shoreline Roger L Beckel Drive 13-117-24-33-0005 5555 Shoreline B S & F Y Moy Drive 13-117-24-33-0006 5545 Shoreline Curtis L Johnson Drive C-1 -149- 13-117-24-33-0009 5519 Shoreline Twin City Metro Transit Area Drive 13-117-24-33-0010 N/A City 13-117-24-33-0011 5501 Shoreline City Drive 13-117-24-33-0012 N/A City 13-117-24-33-0013 N/A City 13-117-24-33-0014 5575 Shoreline Kenneth Perbix Drive 13-117-24-33-0015 5581 Shoreline R & G Lauer Drive 13-117-24-33-0016 2300 Commerce City HRA Blvd 13-117-24-33-0017 2306 Commerce City HRA Blvd 13-117-24-33-0019 N/A City 13-117-24-33-0047 2316 Commerce J E & P M Larson Blvd 13-117-24-33-0048 N/A City 13-117-24-33-0049 5579 Auditors Rd City 13-117-24-33-0050 2334 Commerce City Blvd 13-117-24-33-0051 2348 Commerce City Blvd 13-117-24-33-0076 5533 Shoreline City HRA Drive 13-117-24-33-0090 N/A City 13-117-24-33-0052 2360 Commerce William R Netka et al Blvd 13-117-24-33-0020 2362 Commerce William R Netka et al Btvd 13-117-24-33-0082 2372 Commerce Mound Lodge No 320 Blvd 13-117-24-33-0055 2380 Commerce Michael Joseph Ryan Blvd 13-117-24-33-0056 2388 Commerce T & S Whalen Blvd 13-117-24-33-0057 2396 Commerce A Williams Trustee Blvd 24-117-24-22-0013 2400 Commerce R Falness & R T Falness Blvd 13-117-24-33-0083 2290 Commerce Crow River Bank Blvd * Please note that these parcels are currently being eliminated from TIF District No. 1-2 C-2 -150- APPENDIX D ESTIMATED CASH FLOW FOR THE DISTRICT D-1 -151 - 3/1512008 Page I of 6 O EHLERS CITY OF MOUND - HARBOR RENAISSANCE, LLC ASSUMPTIONS FOR ALL AREAS District New Redevelopment District County District ~ Inflation Rate - Every - Years 2.50% Pay-As-You-Go Interest Rate: 7.00% Bond interest Rate: 6.75% Note issued Date (Present Value Date): 01-Aug-06 Local Tax Rate - Frozen 105.7380% Pay 2005 Est Fiscal Disparities Election {A - outside or B inside) A Year District was codified 2005 Assumes First Tax Increment For District 2007 Year District was Modified NIA Development located in modified area NIA Assumes First Tax Increment For Dev2008 Years of Tax increment 26 Assumes Last Year of Tax Increment 2032 Fiscal Disparities Ratio 31.7378% Pay 2005 Est Fiscal Disparities Metro Wide Tax Rate 129.8630% Pay 2005 Local Tax Rate - Current 105.7380% Pay 2005 Est State V~Ade Property Tax Rate (Used for total taxes) 51.1210% Pay 2005 Est Market Value Tax Rate (used for total taxes) N/A Pay 2005 Est Commercial Industhai Class Rate 1.5%-2.0% First 150,000 1.50% Over 150,000 2.00% Rental Class Rate 1.25% Residential Class Ra - Under $500,000 1.00% Over $500,000 1.25% AREA Use Cull~nt Assigned New New Total Market Value Market Value Class Rata Tax Capacity i Tax Capacity Lost Lake Commercial 223,000 2.00% 4,460 For Sale 153,006 1.00% 1,530 5,990 TOTAL 376~006 376,006 5~990 Auditors Road C'ommer cial 478,279 2.00% 9,566 For Sale 1,015,720 1.00% 10,157 19,723 TOTAL 1,493~999 1,493,999 I9i723 Langdon Lake Commercial 144,900 2.00% 2,898 For Sale 1,550,800 1.00% 15,508 18,406 TOTAL 1;695,700 li695,700 18;406 110 South Commercial 124,050 2100% 2,481 For Sale 1,44fi,9501.00% 14,460 16,941 GRAND TOTAL 5~135,705 61i059 Total Market ValueTaxes Per Total Market Class New Year Date AREA Use Sq. FtJUnltaSq. FL/Units Sq. FL/UnitsT~xes Value Rate Tax Capacity Constn, lctad Payable Lost Lake Commercial 12,500.00 100.00 $3.29 41,129 1,250,000 2.00% 25,000 2006 2008 Lost Lake For Sale 17.00 670,000.00 $7,084.45 120,436 11,390,000 1.00% 113,900 2006 2008 Lost Lake For Sale 20.00 350,000.00 $3,700.83 74,017 7,000,000 1.00% 70,000 2006 2008 TOTAL 235,68 t19,640,000 208,900 Auditors Road Commercial 60,800.00 100.00 $3.29 200,051 6,080,000 2.00% 121,600 2007 2009 Auditors Road For Sale 94.00 240,000.00 $2,537.71 238,545 22,560,000 1.00% 225,600 2007 2009 TOTAL 438,596 28,640,000 347,200 Langdon Lake Commercial 18,375.00 $100.00 $3.29 60,460 1,837,500 2.00% 36,750 2008 2010 Langdon Lake For Sale 127.00 335,000.00 $3,542.22 449,862 42,545,000 1.00% 425,450 2008 2010 Langdon Lake For Sale 5.00 330,000.00 $3,489.35 17,447 1,650,000 1.00% 16,600 2008 2010 TOTAL 527,769 46,032,500 478,700 110 South Commercial 7,500.00 100.00 $3.29 24,677 750,000 2.00% 15,000 2009 2011 110 South For Sale 18.00 300,000.00 $3,172.14 57,099 5,400,000 1.00% 54,000 2009 2011 .TOTAL 81,776 6,150,000 69,000 GRAND TOTAL 1,283,722 100,462,800 1,103,800 Note: 1. Tax estimates are based upon market value, construction costs and taxes per sq/ft. FrOlll developer. Total Local Fiscal Local Fiscal Stata-wide Local Fiscal State-wide Market AREA Tax Tax Disparities Tax Disparities Property Taxes Disparities Property Value Total Capacity Capacity Tax Capacity Rate Tax Rate Tax Rate Taxes Taxes Taxes Taxes Lost Lake 25,000 17,066 7,934 1.05738 1.29863 0.51121 18,046 10,304 12,780 NIA 41,129 Lost Lake 113,900 113,900 0 1.05738 1.29663 0.51121 120,436 0 O NIA 120,436 Lost Lake 70,000 70,000 0 1.05738 1.29863 0.51121 74,017 0 O NIA 74,017 Auditors Road 121,600 83,007 38,593 %05738 1.29863 0.51121 87,770 S0,118 62,163 NIA 200,051 Auditors Road 225,600 225,600 0 1.05738 1.29863 0.51121 238,5~5 0 0 NIA 238,~41i Langdon Lake 36,750 25,086 11,664 1.05738 1.29863 0.51121 26,526 18,147 18,767 NIA 60,460 Langdon Lake 425,450 425,450 0 1.05738 1.29863 0.51121 449,862 0 0 NIA 449,862 Langdon Lake 16,500 16,500 0 1.05738 1.29863 0.51121 17,447 0 0 NIA 17,447 110 South 15,000 10,239 4,761 1.05738 1.29863 0.51121 10,827 6,182 7,668 NIA 24,877 110 South 54,000 54,000 0 1.05738 1.29863 0.51121 87,099 0 0 NtA 57,099 TOTAL 1,034,800 676~608 68,191 1,032,647 76,569 93,730 0 1,201,946 Note: 1. Apartmentslresiriential do not pay State-wide property tax or Fiscal Disparities 2. Assumes Fiscal Disparities is paid outside l}~e district -152- 3115/2005 Page 2 of 6 EHLERS Lost Lake Base Project Fi.cai Captured SemiAnnual State Admin. Semi-Annual Semi.Annual 'AYMENT DATE Tax Tax Dieparltle. Tax Gross Tax Auditor at Net Tax Present PERIOD ENDING Yrs. Mth. Yr, Capacity Capacity Reduction Capacity Increment 0.36% 5,00% Increment Value Yrs. Mth. Yr. 0,0 02-01 2006 5,990 5,990 Present Value Date- 8-01-86 0.0 08-01 2006 0.0 08-01 2006 5,990 5,990 0 0 0 0 0 0 0 0.0 02-01 2007 0.0 02-01 2007 5,990 5,990 0 0 0 0 0 0 0 05 08-01 2007 0.5 08-01 2007 5,990 5,990 0 0 0 0 0 0 0 1 0 02-01 2008 1.0 02-01 2008 5,990 208,900 0 202,910 107,276 (386) (5,345) 101,546 58,920 1.5 08-01 2008 1.5 08-01 2008 5,990 208,900 0 202,910 107,276 (386) (5,345) 101,546 174,937 2.0 02-01 2009 2.0 02-01 2009 5,990 214,123 0 208,132 110,038 (396) (5,482) 104,159 260,287 2.5 08-01 2009 2.5 08-01 2009 5,990 214,123 0 208,132 110,038 (396) (5,482) 104,159 342,851 3.0 02-01 2010 3.0 02-01 2010 5,990 219,476 0 213,486 112,868 (406) (5,623) 106,836 424,773 3.5 08-01 2010 3.5 08-01 2010 5,990 219,476 0 213,486 112,868 (406) (5,623) 106,838 504,021 4.0 02-01 2011 4.0 02-01 2011 5,990 224,962 0 218,972 115,769 (417) (5,768) 109,584 582,652 4.5 08-01 2011 4.5 08-01 2011 5,990 224,962 0 218,972 115,769 (417) (5,768) 109,584 658,716 5.0 02-01 2012 5.0 02-01 2012 5,990 230,587 0 224,596 118,742 (427) (5,916) 112,399 734,186 5.5 08-01 2012 5.5 08-01 2012 5,990 230,587 0 224,596 118,742 (427) (5,916) 112,399 807,192 6.0 02-01 2013 6.0 02-01 2013 5,990 236,351 0 230,361 121,790 (438) (6,068) 115,284 879,627 6.5 08-01 2013 6.5 08-01 2013 5,990 236,351 0 230,361 I21,790 (438) (6,068) 115,284 949,698 7.0 02-01 2014 7.0 02-01 2014 5,990 242,260 0 236,270 124,914 (450) (6,223) 118,241 1,019,219 7.5 08-01 2014 7~5 08-01 2014 5,990 242,260 0 236,270 124,914 (450) (6,223) 118,241 1,086,471 8.0 02-01 2015 8.0 02-01 2015 5,990 248,316 0 242,325 128,116 (461) (6,383) 121,272 1,153,194 85 08-01 2015 8.5 08-01 2015 5,990 248,316 0 242,326 128,116 (461) (6,383) 121,272 1,217,740 9.0 02-01 2016 9.0 02-01 2016 5,990 254,524 0 248,534 131,399 (473) (6,546) 124,378 1,281,777 9.5 08-01 2016 9.5 08-01 2016 5,990 254,524 0 248,534 131,398 (473) (6,546) 124,378 1,343,724 10.0 02-01 2017 10.0 02-01 2017 5,990 260,887 0 254,897 134,762 (485) (6,714) 127,563 1,405,182 10.5 08-01 2017 10.5 08-01 2017 5,990 260,887 0 254,897 134,762 (485) (6,714) 127,563 1,464,634 11.0 02-01 2018 11.0 02-01 2018 5,990 267,410 0 261,420 138,210 (498) (6,886) 130,827 1,523,617 ! 11.5 08-01 2018 11.5 08-01 2018 5,990 267,410 0 261,420 138,210 (498) (6,886) 130,827 1,580,674; 12.0 02-01 2019 12.0 02-01 2019 5,990 274,095 0 268,105 141,744 (510) (7,062) 134,172 1,637,280 12.5 08-01 2019 12.5 08-01 2019 5,990 274,095 0 268,105 141,744 (510} (7,062) 134,172 1,692,037 13.0 02-81 2020 13.0 02-01 2020 5,990 280,947 0 274,957 145,367 (523) (7,242) 137,602 1,746,361 13.5 08-01 2020 13.5 08-01 2020 5,ggO 280,947 0 274,957 145,367 (523) (7,242) 137,602 1,798,911 14.0 02-01 2021 14.0 02-01 2021 5,990 287,971 0 281,981 149,080 (537) (7,427) 141,117 1,851,044 14.5 08-01 2021 14.5 08-01 2021 5,990 287,971 0 281,981 149r080 (537) (7,427) 141,117 1,901,475 15.0 02-01 2022 15.0 02-01 2022 5,990 295,170 0 289,180 152,887 (550) (7,617) 144,719 1,951,505 15.5 08-01 2022 t5.5 08-01 2022 5,990 295,170 0 289,180 152,887 (550) (7,617) 144,719 1,999,901 16.0 02-01 2023 16.0 02'01 2023 5,990 302,549 0 296,559 156,788 (564) (7,811) 148,412 2,047,913 16.5 08-01 2023 16.5 08-01 2023 5,990 302,549 0 296,559 156,788 (564) (7,811) 148,412 2,094,356 17.0 02-01 2024 17.0 02-01 2024 5,990 310,113 0 304,123 160,787 (579) (8,010) 152,198 2,140,430 17.5 08-01 2024 17.5 08-01 2024 5,990 310,113 0 304,123 160,787 (579) (8,010) 152,198 2,184,999 18.0 02-01 2025 18.0 02-01 2025 5,990 317,866 0 311,876 164,886 (594) (8,215) 156,075 2,229,212 18.5 08-01 2025 18.5 08'01 2025 5,990 317,866 0 311,876 164,886 (594) (8,215) 156,079 2,271,981 19.0 02'01 2026 19.0 02-01 2026 5,990 325,813 0 319,823 169,087 (609) (8,424) 160,054 2,314,409 19.5 08-81 2026 195 08-01 2026 5,990 325,813 0 319,823 169,087 (609) (8,424) 160,054 2,355,451 20.0 02-81 2027 20~0 02-01 2027 5,990 333,958 0 327,968 173,393 (624) (8,638) 164,131 2,396,164 20.5 08-01 2027 20.5 08-01 2027 5,990 333,958 0 327,968 173,393 (624) (8,638) 164,131 2,435,549 21.0 02-01 2028 21.0 02-01 2028 5,990 342,307 0 336,317 177,807 (640) (8,858) 168,309 2,474,617 21.5 08-01 2028 21.5 08-01 2028 5,990 342,307 0 336,317 177,807 (640) (8,858) 168,309 2,512,410 22.0 02-01 2029 22.0 02-01 2029 5,990 350,865 0 344,875 182,332 (656) (9,084) 172,592 2,549,899 22.5 08-01 2029 22.5 08-01 2029 5,990 350,865 0 344,875 182,332 (656) (9,084) 172,592 2,586,164 23.0 02-01 2030 23.0 02-01 2030 5,990 359,636 0 353,646 186,969 (673) (9,315) 176,981 2,622,137 23.5 08'31 2030 23~5 08-01 2030 5,990 359,636 0 353,646 186,969 (673) (9,315) 176,981 2,656,936 24.0 02-01 2031 24.0 02-01 2031 5,990 368,627 0 362,637 191,723 (690) (9,552) 181,481 2,691,455 24.5 08-01 2031 24.5 08-01 2031 5,990 368,627 0 362,637 191,723 (690) (9,552) 181,481 2,724,847 25.0 02-81 2032 25.0 02-01 2032 5,990 377,843 0 371,853 196,595 (708) (9,794) 186,093 2,757,969 25.5 08-01 2032 25.5 08-01 2032 5,990 377,843 0 371,853 196,595 (708} (9,794) 186,093 2,790,010 26.0 02-01 2033 Totals 7,386,651 {26,592) (368,003) 6,992~056 Present Value Date - 8-81-O6 2~947~464 (10,611} {146,843) 2,790~010 2,790,010 NOTES: 1. State Auditor payment is based upon 1st half, pay 2005 actua~ and may increase over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation Oll Market Value. 4. inflation on tax rates cannot be captured~ 5. TIF does not capture state wide property taxes or market value property taxes prepared by Ehlerm -153- 311512005 Page 3 of 6 Auditors Road Base Project Fiacal Captured Semi-Annual State Admin. Semi-Annual Semi-Annual =AYMENT DATE Tax Tax OtlpaHtiea Tax Gross Tax Auditor at Net Tax Present PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 5.00% Increment Value yrs. Mth. Yr. 0.0 02-0t 2006 19,723 19,723 Present Value Date - 8-01-08 0.0 O8-01 2006 0.0 08-01 2006 19,723 19,723 0 0 0 0 0 0 0 0.0 02-01 2007 0.0 02-01 2007 19,723 19,723 0 0 0 0 0 0 0 0.5 08-01 2007 0.5 08-01 2007 19,723 19,723 0 0 0 0 0 0 0 1.0 02-01 2008 1.0 02-01 2008 19,723 19,723 0 0 0 0 0 0 0 1.5 08-01 2008 1.5 08-01 2008 19,723 19,723 0 0 0 0 0 0 0 2.0 02-01 2009 2.0 02-01 2009 19,723 347,200 0 327,477 173,134 (623) (8,626) 163,885 134,291 2.5 08-01 2009 2.5 08-01 2009 19,723 347,200 0 327,477 173,134 (623) (8,626) 163,885 264,197 3.0 02-01 2010 3.0 02-01 2010 19,723 355,880 0 336,157 177,723 (640) (8,854) 165,229 393,193 3.5 08-01 2010 3.5 08-01 2010 19,723 355,880 0 338,157 177,723 (640) (8,854) 168,229 517,978 4.0 02-01 2011 4.0 02-O1 2011 19,723 364,777 0 345,054 182,427 (657) (9,088) 172,681 641,884 4.5 08-01 2011 4,5 08-01 2011 19,723 364,777 0 345,054 182,427 (657) (9,088) 172,681 761,744 5.0 02-01 2012 5.0 02-01 2012 19,723 373,896 0 354,174 187,248 (674) (9,329) 177,245 880,755 5.5 08-01 2012 5.5 08-01 2012 19,723 373,896 0 354,174 187,248 (674) (9,329) 177,245 995,881 6.0 02-01 2013 6.0 02-01 2013 19,723 383,244 0 363,521 192,190 (692) (9,575) 181,923 1,110,187 6.5 08-01 2013 6.5 08-01 2013 19,723 353,244 0 363,521 192,190 (692) (9,575) 181,923 1,220,762 7.0 02-01 2014 7.0 02-01 2014 19,723 392,825 0 373,102 197,255 (710) (9,827) 186,718 1,330,546 7.5 08-01 2914 7.5 08-01 2014 19,723 392,825 0 373,102 197,255 (710) (9,827) 186,718 1,436,745 8,0 02-01 2015 8.0 02-01 2015 19,723 402,646 0 382,923 202,447 (729) (10,086) 191,633 1,542,181 8.5 08-01 2015 8.5 08-01 2015 19,723 402,646 0 382,923 202,447 (729) (10,086) 191,633 1,644,175 9.0 02-01 2016 9.0 02-01 2016 19,723 412,712 0 392,989 207,769 (748) (10,351) 196,670 1,745,433 9.5 08-01 2016 9.5 08-01 2016 19,723 412,712 0 392,989 207,769 (748) (10,351) 196,670 1,843,385 10.0 02-01 2017 10.0 02-01 2017 19,723 423,029 0 403,307 213,224 (768) (10,623) 201,834 1,940,627 10.5 08-01 2017 10.5 08-01 2017 19,723 423,029 0 403,307 213,224 (768) (10,623) 201,834 2,034,694 11.0 02-01 2018 11.O 02-01 2018 19,723 433,605 0 413,882 218,816 (788) (10,901) 207,126 2,128,076 11.5 08-01 2018 11.5 08-01 2018 19,723 433,605 0 413,882 218,816 (788) (10,901) 207,126 2,218,409 12.0 02-01 2019 12.0 02-01 2019 19,723 444,445 0 424,723 224,547 (808) (11,187) 212,551 2,308,081 12.5 08-01 2019 12.5 08-01 2019 19,723 444,445 0 424,723 224,547 (808) (11,187) 212,551 2,394,826 13.0 02-01 2020 13.0 02-01 2020 19,723 455,556 0 435,834 230,421 (830} (11,480) 218,112 2,480,935 13.5 08-01 2020 13.5 08-01 2020 19,723 455,556 0 435,834 230,421 (830) (11,480) 218,112 2,564,232 14.0 02-01 2021 14.0 02-01 2021 19,723 466,945 0 447,223 236,442 (851) (11,780) 223,811 2,646,915 14.5 08-01 2021 14.5 08-01 2021 19,723 466,945 0 447,223 236,442 (851) (11,780) 223,811 2,726,898 15.0 02-01 2022 15.0 02-01 2022 19,723 478,619 O 458,896 242,614 (873) (12,087) 229,653 2,806,290 15.5 08-01 2022 15.5 08-01 2022 19,723 478,619 O 458,896 242,614 (873) (12,087) 229,653 2,883,090 16.0 02-01 2023 16.0 02-01 2023 19,723 490,585 0 470,862 248,940 (896) (12,402) 235,642 2,959,320 16.5 08-01 2023 16.5 08-01 2023 19,723 490,585 0 470,862 248~940 (896) (12,402) 235,642 3,033,061 17.0 02-01 2024 17.0 02-01 2024 19,723 502,849 0 483,126 255,424 (920) (12,725) 241,779 3,106,252 17.5 08-01 2024 17.5 08-01 2024 19,723 502,849 0 483,126 255,424 (920) (12,725) 241,779 3,177,054 18.0 02-01 2025 18.0 02-01 2025 19,723 515,420 0 495,698 262,070 (943) (13,056) 248,071 3,247,327 18.5 08-01 2025 18.5 08-01 2025 19,723 515,420 0 495,698 262,070 (943) (13,056) 248,071 3,315,305 19.0 02-01 2026 19.0 02-01 2026 19,723 528,306 0 508,583 268,883 (968) (13,396) 254,519 3,382,773 19.5 08-01 2026 19.5 08-01 2026 19,723 528,306 0 508,583 268,883 (968) (13,396) 254,519 3,448,039 20.0 02-01 2027 20.0 02-01 2027 19,723 541,514 0 521,791 275,866 (993) (13,744) 261,129 3,512,813 20.5 08-01 2027 20.5 08-01 2027 19,723 541,514 0 521,791 275,866 (993) (13,744) 261,129 3,575,472 21.0 02-01 2028 21.0 02-01 2028 19,723 555,051 0 535,329 283,023 (1,019) (14,100) 267,904 3,637,659 21.5 08-01 2028 21.5 08-01 2028 19,723 555,051 0 535,329 283,023 (1,019) (14,100) 267,904 3,697,815 22.0 02-01 2029 22.0 02-01 2029 19,723 568,928 0 549,205 290,359 (1,045) (14,468) 274,848 3,757,516 22.5 08-01 2029 22.5 08-01 2029 19,723 568,926 0 549,205 290,359 (1,045) (14,466) 274,848 3,815,267 23,0 02-01 2030 23.0 02-01 2030 19,723 583,151 0 563,428 297,879 (1,072) (14,840) 281,966 3,872,580 23.5 08-01 2030 23.5 O8-01 2030 19,723 583,151 0 563,428 297,879 (1,072) (14,840) 281,966 3,928,022 24.0 02-01 2031 24.0 02-01 2031 19,723 597,730 0 578,007 305,586 (1,100) (15,224) 289,262 3,983,041 24.5 08-01 2031 24.5 O8-01 2031 19,723 597,730 0 578,007 305,586 (1,100) (15,224) 289,262 4,036,264 25.0 02-01 2032 25.0 O2-01 2032 19,723 612,673 0 592,950 313,487 (1,129) (15,618) 296,740 4,089,080 25~5 08-01 2032 25.5 08-01 2032 19,723 812~673 0 592~950 313,487 (1,129) (15,618) 296,740 4~140~173 26.0 02-01 2033 Totala 11,375,547 (40~952) (566~730) 10~767~885 Present Value Date -8-01-06 4,373,822 (15~746) (217~904) 4,140~173 4,140,173 NOTES: 1. State Auditor payment is based upon 1st half, pay 2005 actual and may i~lcrease over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3. Amount of increment will vary depending upon market value, tax rates, class retes, construction schedule and inflation on Market Value. 4. Inflation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes or market value property taxes Prepared by Ehlers -154- 311512006 Page 4 of 6 OEHLERS Langdon Lake Base Project Fiscal Captured Semi-Annual State Admin. Semi-Annual Semi-Annual 3AYMENT DATE Tax Tax Dillparlties Tax Gross Tax Auditor at Net Tax present ;~ERIOD ENC)ING yrs. Mth. Yr. Capacity Capacity Reduction Capacity fncrement 0.36% 5.00% increment Value Yrs. Mth. Yr. 0.0 02-01 2006 18,406 18,406 Present Value Date - 8-01-O6 0,0 08-01 2006 0.0 08-01 2006 18,406 18,406 0 0 0 0 0 0 0 0.0 02-01 2007 0,0 02-01 2007 18,406 18,406 0 0 0 0 0 0 0 0.5 08-01 2007 0.5 08-O1 2007 18,406 18,406 0 0 0 0 0 0 0 1.0 02-01 2008 1.0 02-01 2008 18,406 18,408 0 0 0 0 0 0 0 1.5 08-01 2008 1.5 08-01 2008 18,406 18,406 0 0 0 0 0 0 0 2.0 02-01 2009 2.0 02-01 2009 18,406 18,406 0 0 0 0 0 0 0 2.5 08-01 2009 2.5 08-01 2009 18,406 18,406 0 0 0 0 0 0 0 3.0 02-01 2010 3.0 02-01 2010 18,406 478,700 0 480,294 243,353 (876) (12,124) 230,353 176,632 3.5 08-01 2010 3.5 08-01 2010 18,406 478,700 0 460,294 243,353 (876) (12,124) 230,353 347,497 4,0 02-01 2011 4.0 02-01 2011 18,406 490,668 0 472,262 249,680 (899) (12,439) 236,342 517,082 45 08-01 2011 4.5 08-01 2011 18,406 490,668 0 472,262 249,680 (899) (12,439) 236,342 681,129 50 02-01 2012 5,0 02-01 2012 18,406 502,934 0 484,528 256,165 (922) (12,762) 242,481 843,943 5~5 08-01 2012 5.5 08-01 2012 18,406 502,934 0 484,528 256,165 (922) (12,762) 242,481 1,001,442 6.0 02-01 2013 6.0 02-01 2013 18,406 515,508 0 497,102 262,813 (946) (13,093) 248,773 1,157,751 6.5 08-01 2013 6.5 08-01 2013 18,406 515,508 0 497,102 262,813 (946) (13,093) 248,773 1,308,958 70 02-01 2014 7.0 02-01 2014 18,406 528,395 0 509,989 269,626 (971) (13,433) 255,223 1,459,020 7.5 08-01 2014 7.5 08-01 2014 18,406 528,395 0 509,989 259,626 (971) (13,433) 255,223 1,604~183 8.0 02-01 2015 8.0 O2-01 2015 18,406 541,605 0 523,199 276,610 (996) (13,781) 261,834 1,748,244 8.5 08-01 2015 8,5 08-01 2015 18,406 541,605 0 523,199 276,610 (996) (13,781) 261,834 1,887,601 9.0 02-01 2016 90 02-01 2016 18,406 555,145 0 536,739 283,769 (1,022) (14A37) 268,610 2,025,898 9.5 08-01 2016 9~5 08-01 2016 18,406 555,145 0 536,739 283,769 (1,022) (14,137) 268,610 2,159,679 10.0 02-01 2017 10.0 02-01 2017 18,406 569,024 0 550,618 291,106 (1,048) (14,503) 275~555 2,292,439 10,5 08-01 2017 10.5 08-01 2017 18,406 569,024 0 550,618 291,106 (1,048) ~'14,503) 275,555 2,420,865 11,0 02-01 2018 11.0 02-01 2018 18,406 583,249 0 564,843 298,627 (1,075) (14,878) 282,674 2,548,307 115 08-01 2018 11.5 08-01 2018 18,406 583,249 0 564,843 298,627 (1,075) (14,878) 282,674 2,671,589 12.0 02-01 2019 120 02-01 2019 18,406 597,831 0 579,425 306,336 (1,103) (15,262) 289,972 2,793,924 12.5 O8-01 2019 12.5 08-01 2019 18,406 597,831 0 579,425 306,336 (1,103) (15,262) 289,972 2,912,266 13.0 02-01 2020 13.0 02-01 2020 18,406 612,776 0 594,370 314,238 (1,131) (15,655) 297,451 3,029,696 13.5 08-01 2020 13.5 08-01 2020 18,406 612,776 0 594,370 314,238 (1,131) (15,655) 297,451 3,143,293 14.0 02-01 2021 14.0 02-01 2021 18,406 628,096 0 609,690 322,337 (1,160) (16,059) 305,118 3,256,013 14.5 08-01 2021 14.5 09-01 2021 18,406 628,996 0 609,690 322,337 (1,160) (16,059) 305,118 3,365,053 15.0 02-01 2022 15.0 02-01 2022 18,406 643,798 0 625,392 330,639 (1,190) (16,472) 312,976 3,473,250 15.5 08-01 2022 15.5 08-01 2022 18,406 643,798 0 625,392 330,639 (1,190) (16,472) 312,976 3,577,914 160 02-01 2023 16.0 02-01 2023 18,406 659,893 0 641,487 339,148 (1,221) (16,896) 321,031 3,681,767 16.5 08-01 2023 16.5 08-01 2023 18,406 659,893 0 641,487 339,148 (1,221) (16,896) 321,031 3,782,229 17.0 02-01 2024 17.0 02-O1 2024 18,406 676,391 0 657,985 347,870 (1,252) (17,331) 329,287 3,881,911 17.5 08-01 2024 17.5 08-01 2024 18,406 676,391 0 657,985 347,870 (1,252) (17,331) 329,287 3,978,338 18.0 02-01 2025 18.0 02-01 2025 18,406 693,300 0 674,894 356,610 (1,285) (17,776) 337,749 4,074,015 18.5 08-01 2025 18.5 08-01 2025 18,406 693,300 0 674,894 356,810 (1,285) (17,776) 337,749 4,166,567 19.0 02-01 2026 19~0 02-01 2026 18,406 710,633 0 692,227 365,973 (1,318) (18,233) 346,423 4,258,397 19.5 08-01 2026 19.5 08-01 2026 18,406 710,633 0 692,227 365,973 (1,318) (18,233) 346,423 4,347,230 20.0 02-01 2027 200 02-01 2027 18,406 728,399 0 709,993 375,366 (1,351) (18,701) 355,314 4,435,367 20.5 08-01 2027 20,5 08-01 2027 18,406 728,399 0 709,993 375,366 (1,351) (18,701) 355,314 4,520,627 21.0 02-01 2028 21,0 02-01 2028 18,406 746,609 0 728,203 384,993 (1~386) (19,180) 364,427 4,605,219 21.5 08-01 2028 21.5 08-01 2028 18,406 746,609 0 728,203 384,993 (1,386) (19,180) 364,427 4,687,049 22.0 02-01 2029 22.0 02-01 2029 18,406 765,274 0 746,868 394,862 (1,422) (19,672) 373,768 4,768,236 22,5 08-01 2029 22.5 08-01 2029 18,406 765,274 0 746,868 394,862 (1,422) (19~672) 373,768 4,846,773 230 02-01 2030 23.0 02-01 2030 18,406 784,406 0 766,000 404,976 (1,458) (20,176) 383,343 4,924.691 235 08-01 2030 23.5 08-01 2030 18,406 784,406 0 766,000 404,976 (1,458) (20,176) 383,343 5,000,066 24.0 02-01 2031 24.0 02-01 2031 18,406 804,016 0 785,610 415,344 (1,495) (20,692) 393,156 5,074,847 24.5 08-01 2031 24.5 08-01 2031 18,406 804~016 0 785,610 415,344 (1,495) (20,692) 393,156 5,147,186 25.0 02-01 2032 25.0 02-01 2032 18,406 824,116 0 805,710 425,971 (1,533) (21,222) 403,216 5,218,954 25.5 08-01 2032 25.5 08-01 2032 18,406 824,116 0 805,710 425,971 (1,533/ (21,222) 403,216 5,288,379 26.0 02-01 2033 Totals 15,033,223 {54~120) {748~955} 14,230,149 ,resent Value Date - 8-OI-06 5,586,827 (20,113) (278,336) 5,288;379 5~288,379 NOTES: 1. State Auditor payment is based upon 1st half, pay 2005 actual and may increase over term of district 2. TIF run does not reflect potential reductien in Market Value Homestead Credit 3. Amount of incremerlt will vary depending upon market ValUe, tax rates, class rates, construction schedule and inflation Ol"i Market Value, 4. Inflation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes or market value property taxes Prepared by Eh~ers -155- 3115/2005 Page 5 of 6 O EHLERS 110 South Bass Project Fiscal Captured Semi-Annual State Admin. Semi-Annual Semi-Annual PAYMENT DATE Tax Tax Dilparttle$ Tax Gross Tax Auditor at Net Tax Present PERIOD ENDING Yrs. Mth. Yr, Capacit7 Capacity Reduction Capacity Increment 0.36% 5.00% Increment Value Yrs. Mth. Yr. 0.0 02-01 2006 16,941 16,941 Present Value Date- 8-OI-O6 0.0 08-01 2006 0.0 08-01 2006 16,941 16,941 0 0 0 0 0 0 0 0.0 02-01 2007 0.0 02-01 2007 16,941 16,941 0 0 0 0 0 0 0 0.5 08-01 2007 0.5 08-01 2007 16,941 16,941 0 0 0 0 0 0 0 1.0 02-01 2008 1.0 02-01 2008 16,941 16,941 0 0 0 0 0 0 0 1.5 08-01 2008 1.5 08-01 2008 16,941 16,941 0 0 0 0 0 0 0 2.0 02-01 2009 2.0 02-01 2009 16,941 16,941 0 0 0 0 0 0 0 2.5 08-01 2009 2.5 08-01 2009 16,941 16,941 0 0 0 0 0 0 0 3.0 02-01 2010 3.0 02-01 2010 16,941 16,941 0 0 0 0 0 0 0 3.5 08-01 2010 3.5 08-01 2010 16,941 16,941 0 0 0 0 0 0 0 4.0 02-01 2011 4.0 02-01 2011 16,941 69,000 0 52,060 27,623 (99) (1,371) 26,053 18,694 4.5 08-01 2011 4.5 08-01 2011 16,941 69,000 0 52,O60 27,523 (99) (1,371) 26~053 36,778 5.0 02-01 2012 5.0 02-01 2012 16,941 69,000 0 52,O60 27,523 (99) (1,371) 26,053 54,271 5.5 08-01 2012 5.5 08-01 2012 16,941 69,000 0 52,060 27,523 (99) (1,371} 26,053 71,193 6.0 02-01 2013 6.0 02-01 2013 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 87,563 6.5 08-01 2013 6.5 08-01 2013 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 103,398 7.0 02-01 2014 7.0 02-01 2014 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 118,717 7.5 08-01 2014 7.5 08-01 2014 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 133,535 8.0 02-01 2015 8.0 02-01 2015 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 147,869 8.5 O8-01 2015 8.5 08-01 2015 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 161,735 9.0 O2-01 2016 9.0 02-01 2016 16,941 69,000 0 62,060 27,523 (99) (1,371) 26,053 175,149 9.5 08-01 2016 9.5 08-01 2016 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 188,125 10.0 02-01 2017 10.0 02-01 2017 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 200,677 10,5 08-01 2017 10.5 08-01 2017 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 212,819 11.0 02-01 2018 11.0 02-01 2018 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 224,565 11.5 08-01 2018 11.5 08-01 2018 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 235,928 12.0 02-01 2019 12.0 02-01 2019 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 246,919 12.5 08-01 2019 12.5 08-01 2019 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 257,552 13.0 02-01 2020 13.0 02-01 2020 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 267,837 13.5 08-01 2020 13.5 O8-01 2020 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 277,787 14.0 02-01 2021 14.0 02-01 2021 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 287,412 ! 14.5 08-01 2021 14.5 08-01 2021 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 296,722 15.0 02-01 2022 150 02-01 2022 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 305,729 15.5 08-01 2022 15.5 08-01 2022 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 314,441 16.0 02-01 2023 t6.0 02-01 2023 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 322,870 16.5 08-01 2023 16.5 08-01 2023 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 331,022 17.0 02-01 2024 17.0 02-01 2024 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 338,909 17.5 08-01 2024 17.5 08-01 2024 16,941 69,000 0 52,060 27,523 (99) (1,37t) 26,053 346,539 18.0 02-01 2025 18.0 02-01 2025 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 353,919 18.5 08-01 2025 18.5 08-01 2025 16,941 69,000 0 52,060 27,523 (gg) (1,371) 26,053 361,058 19.0 02-01 2026 19.0 02-01 2026 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 367,964 19.5 08-01 2026 19.5 08-01 2026 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 374,645 20.0 02-01 2027 20.0 02-01 2027 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 381,107 20.5 08-01 2027 20.5 08-01 2027 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 387,359 21.0 02-01 2028 2t.0 02-01 2028 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 393,407 21.5 08-01 2028 21.5 08-01 2028 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 399,257 22.0 02-01 2029 22.0 02-01 2029 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 404,916 22.5 08-01 2029 22.5 08-01 2029 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 410,390 23.0 02-01 2030 23.0 02-01 2030 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 415,686 23.5 08-01 2030 23.5 08-01 2030 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 420,808 24.0 02-01 2031 24.0 02-01 2031 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 425,764 24.5 08-01 2031 24.5 08-01 2031 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 430,557 25.0 02-01 2032 25.0 02-01 2032 16,941 69,000 0 52,060 27,523 (99) (1,371) 26,053 435,194 25.5 08-01 2032 25.5 08-01 2032 16,941 69~000 0 52,060 27,523 (99) (11371) 26,053 439,680 26.0 02-01 2033 Totall 1~211r027 (4,360} (60f333) 11146,334 present Value Date - 8-01-00 464,493 (1,672) (23f141) 439F680 439~680 dOTES: 1. State Auditor payment is based upon let half, pay 2005 actual and may increase over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3, Arllount of increment Will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value. 4. Infl;ation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes Or market value property taxes Prepared by Ehlerl -156- 311512005 Page 6 of 6 O EHLERS ALL AREAS Base Project FI,cai Captured Semi-Annual State Admin. Semi-Annual Semi.Annual PAYMENT DATE Tax Tax Oiaparlfle, Tax Gross Tax Auditor at Net Tax present PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Reduction Capacity Increment 0.36% 5.00% increment Value Yrs. Mth. Yr. 0.0 02-01 2006 61,059 61,059 Present Value Date - 6-01-06 0.6 06-01 2006 0.0 08-01 2006 61,059 61,059 0 0 0 0 0 0 0 0.0 02-01 2007 0.0 02-01 2007 61,059 61,059 0 0 0 0 0 0 0 0.5 08-01 2007 0.5 08-01 2007 61,059 81,059 0 0 0 0 0 0 0 1.0 02-01 2008 1.0 02-01 2008 61,059 263,969 0 202,910 107,276 (386) (5,345) 101,546 88,920 1.5 08-01 2008 1.5 08-01 2008 61,059 263,969 0 202,910 107,276 (386) (5,345) 101,546 174,937 2.0 02-01 2009 2.0 02-01 2009 61,059 596,669 0 535,610 283,171 (1,019) (14,108) 268,044 394,578 2.5 08-01 2009 2.5 06-01 2009 61,059 596,669 0 535,610 283,171 (1,019) (14,108) 268,044 607,048 t 3.0 02-01 2010 3.0 02-01 2010 61,059 1,070,996 0 1,009,937 533,943 (1,922) (26,601) 505,420 994,599 r 3.5 08-01 2010 3.5 08-01 2010 61,059 1,070,996 0 1,009,937 533,943 (1,922) (26,601) 505,420 1,369,497/ 4.0 02-01 2011 4.0 02-01 2011 61,059 1,149,407 0 1~088,348 575,398 (2,071) (28,666) 544,661 1,760,311 4.5 08-01 2011 4.5 08-01 2011 61,059 1,149,407 0 1,088,348 575,398 (2,071) (28,666) 544,661 2,138,367 5.0 02-01 2012 5.0 02-01 2012 61,059 1,176,417 0 1,115,358 589,679 (2,123) (29,378) 558,178 2,513,155 5.5 08-01 2012 5.5 08-01 2012 6%059 1,176,417 0 1,115,358 588,679 (2,123) (29~378) 558,178 2,875,708 6.0 02-01 2013 6.0 02-01 2013 61,059 1,204,103 0 1~143,043 604,316 (2,176) (30,107) 572,033 3,235,129 6.5 08-01 2013 6.5 08.01 2013 61,059 1,204,103 0 1,143,043 604,316 (2,176) (30,107) 572,033 3,582,816 7.0 02-01 2014 7.0 02-01 2014 61,059 1,232,480 0 1,171,421 619,318 (2,230) (30,854) 586,234 3,927,501 7.5 08-01 2014 7.5 08-01 2014 61,059 1,232,480 0 1,171,421 619,318 (2,230) (30,854) 586,234 4,260,933 8.0 02-01 2015 8.0 02-01 2015 61,059 1,261,567 D 1,200,508 634,696 (2,285) (31,621) 600,791 4,591,489 8.5 08-01 2015 8.5 08-0I 2015 61,059 1,261,567 0 1,200,508 634,696 (2,285) (31,621) 600,791 4,911,252 9.0 02-01 2016 9.0 02-01 2016 61,059 1,291,381 0 1,230,322 650,459 (2,342) (32,406) 615,711 5,228,257 9.5 08-01 2016 9.5 08-01 2016 61,059 1,291,381 0 1,230,322 650,459 (2,342) (32,406) 615,711 5,534,913 10.0 02-01 2017 10.0 02-01 2017 61,059 1,321,941 0 1,260,881 666,615 (2,400) (33,211) 631,005 5,838,925 10.5 08-01 2017 10.5 08-0t 2017 61,059 1,321,941 0 1,260,881 666,615 (2,400) (33,211) 631,905 6,133,012 11.0 02-01 2018 11.0 02-01 2018 61,059 1,353,264 0 1,292,205 683,176 (2,459) (34,036) 646,681 6,424,565 11.5 08-01 2018 11.5 08-01 2018 61,059 1,353,264 0 1,292,205 683,176 (2,459) (34,036) 646,681 6,706,599 12.0 02-01 2019 12.0 02-01 2019 61,059 1,385~371 0 1,324,312 700,150 (2,521) (34,881) 662,748 6,986,204 12.5 08-01 2019 12.5 08-01 2019 61,059 1,385,371 0 1,324,312 700,150 (2,521) (34~881) 662,748 7,256,681 13.0 02-01 2020 13.0 02-01 2020 61,059 1,418,280 0 1~357,221 717,549 (2,583) (35,748) 679,218 7,524,829 13.5 08-01 2020 13.5 08-01 2020 61,059 1,4t8,280 0 1,357,221 717,549 (2,583) (35,748) 679,218 7,784,222 14.0 02-01 2021 14.0 02-01 2021 61,059 1,452,012 0 1,390,953 735,383 (2,647) (36,637) 696,089 8,041,383 14.5 02-01 2021 14.5 08-01 2021 61,059 t,452,012 0 1,390,953 735,383 (2,647) (36,637) 696,099 8,290,148 15.0 02-01 2022 15.0 02-01 2022 61~059 1,486,588 0 1,425,528 753,663 (2,713) (37,547) 713,402 8,536,774 15.5 02-01 2022 15.5 08-01 2022 61,059 1,486,588 0 1,425,528 753,663 (2,713) (37,547) 713,402 8~775,347 16.0 02-01 2023 16.0 02-01 2023 61,059 1,522,027 0 1,460,968 772,399 (2,781) (38,481) 731,138 9,011,869 16.5 02-01 2023 16.5 08-01 2023 61,059 1,522,027 0 1,460,968 772,399 (2,781) (38,481) 731,138 9,240,669 17.0 02~01 2024 17.0 02-01 2024 61,059 1,558,353 0 1,497,294 791,604 (2~850) (39,438) 749,317 9,467,502 17.5 02-01 2024 17.5 08-01 2024 61,059 1,558,353 0 1,497,294 791,604 (2,850) (39,438) 749,317 9,686,929 180 02-0I 2025 18.0 02-01 2025 61,059 1,595,587 0 1,534,527 811,289 (2,921) (40,418) 767,950 9,904,471 18.5 02-01 2025 18.5 08-01 2025 61,059 1,595,587 0 1,534,527 811,289 (2,921) (40,418) 767,950 10,114,911 19.0 02-01 2026 19.0 02-01 2026 61,059 1,633,751 0 1,572,692 831,467 (2,993) (41,424) 787,050 10,323,543 19.5 02-01 2026 19.5 08-01 2026 61,059 1,633,751 0 1,572,692 831,467 (2,993) (41,424) 787,050 10,525,364: 20.0 02-01 2027 20.0 02-01 2027 61,059 1,672,870 0 1,611,811 852,148 (3,068) (42,454) 606,627 10,725,452 20.5 02-01 2027 20.5 08-01 2027 61,059 1,672,870 0 %611,811 852~148 (3,068) (42,454) 806,627 10,919,007 21.0 02-01 2028 21.0 02-01 2028 61,059 1,712,967 0 1,651,908 873,347 (3,144) (43,510) 826,693 11,110,901 21.5 02-01 2028 2%5 08-01 2028 61,059 1,712,967 0 1,651,908 873,347 (3,144) (43,510) 826,693 11,296,530 22.0 02-01 2029 22.0 02-01 2029 61,059 1,754,066 0 1,693,007 895~976 (3,222) (44,593) 847,261 11,480,566 22.5 02-01 2029 22.5 08-01 2029 6%059 1,754,066 0 1,693~007 895,076 (3,222) (44,593) 847,261 11,658,594 23.0 02-01 2030 23.0 02-01 2030 61,059 1,796,193 0 1,735,133 917,348 (3,302) (45,702) 868,343 11,835,094 23.5 02-01 2030 23.5 08-01 2030 61,059 1,796,193 0 1,735,133 917,348 (3,302) (45,702) 868,343 12,005,832 24.0 02-01 2031 24.0 02-01 2031 61,059 1,839,373 0 1,778,313 940,176 (3,385) (46,840) 889,952 12,175,107 24.5 02-01 2031 24.5 08-01 2031 61,059 1,839,373 0 1,778,313 940,176 (3,385) (46,840) 889,952 12,338,854 25.0 02-01 2032 25.0 02-01 2032 61,059 1,883,632 0 1,822,573 963,576 (3,469) (48,005) 912,102 12,501,198 25.5 02-01 2032 25.5 08-01 2032 61,059 1,883,632 0 1,822,573 963,576 (3,469/ (48,005) 912,102 12,658~242 26.0 02-01 2033 Totals 35,006,448 (128~023) {1,744,021) 33~136,404 Present Val,;e Date - 8-01-08 13,372,607 (48,141) {666,293) 12,658,242 12~658,242 NOTES: 1. State Auditor payment is based upon 1st half, pay 2005 actual and may increase over term of district 2. TIF run does not reflect potential reduction in Market Value Homestead Credit 3. Amount of increment will vary depending upon market value, tax rates, class rates, construction schedule and inflation on Market Value. 4. inflation on tax rates cannot be captured. 5. TIF does not capture state wide property taxes or market value property texas Prepared by Ehlers Cashflows 3-10-o5 -157- APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT) E-1 -158- C Please fill in date agreement signed (same as question 21) Minnesota Business Assistance Form The Minnesota Business Assistance Form (MBAF) is used to report each business subsidy (including Job Opportunity Zone (JOBZ) tax exemptions/credit) and financial assistance agreement signed from August 1, 1999 through December 31T 2004 unless goals have been achieved and reported on a MBAF per Minn. Stat. § 116J.993 to § 116J.995. · Businesses receiving JOBZone Benefits must report through 2015 even if goals have been achieved. The following government agencies must submit a MBAF: 1) any local government/agency that signed a busir~ss subsidy agreement since January 1, 1999, or represents a population of more than 2,500; 2) all state government agencies authorized to provide business subsidies. · DEED will contact any local or state government agency that is required to report but has not done so by Aprt 1. Business assistance may not be awan:ted after June 1 of each year until a report has been submitted. · Questions? Call (651 ) 296-0580. Information on where to mail or fax your completed MBAF(s) is on page 5. An online version of this form is available at www.deed.state.mn.us/Community/subsidies/MBAFForm.htm Section 1: (Grantor Information) 1. Name of ~rantor (funding entity} 2. Name of person completing this form 3. Street address 4. City 5. Zip Code 6. County 7. Phone number 8. Fax number 9. E-mail address 10. Please indicate who in your organization should receive the MBAF if different fi.om the person in Question 2. Name/Title Phone number Street address City Zip Code 11. Classification of grantor ~ark one. If grantor is entity created 12. Has your organization held a public hearing on and adopted by gov 't agency, please indicate affiliation. For example, a city criteria for awarding business subsidies in compliance with EDA would check "City government. ") Minn. Stat. § 116J.9947 (Mark one.) ~ City government rn Yes, in 2005 (attach criteria) rn Yes, in 2005 but have notyet adopted criteria [21 County governma~t ~ Yes, prior to 2005 vi Regional government If Yes: Hearing Date: __ Year Criteria Submitted: vi State government [] No rn Other (Please specify) [] Other (Please attach explanation.) 13. Has your organization signed any agreements to award a business subsidy or financial assistance fi.om August 1, 1999 through December 31, 2004 unless goals have been aclfieved and reported in a previously filed MBAF? (Mark one.) ~1 Yes (Complete the remainder of the form unless goals have been achieved and [] No(Stop here, go to section $ on page 4.) re?orted in a ~orevious~v filed MBAF per Minn. Stat. ![116J. 993 and ~1 ] 6J. 994.) Section 2: Recipient Information 14. Name of business or organization receiving subsidy or financial assistance 15. Address where business subsidy or financial assistance will be used Street address City State ZIP Code 16. Does the recipient have a parent corporation? (Mark one.) [] Yes (Indicate name and address of parent corporation below. If more than one, indicate ultimate owner.) rn No Name of parent corporation Street address City State ZIP Code Minnesota Business Assistance Form (02/01/05) Page 1 of 5 Dept. of Employment and Economic Development -159- 17. Indust~ of recipient's facility (Mark one.): [] Manufacturing rn Retail Trade [] Services [] Finance, Insurance, Real Estate [] Wholesale Trade [] Construction [] Other (please specify) 18. Did the recipient relocate as a result of signing this agreement? (Mark one.) [] Yes (Indicate city and state of previous address and reason recipient didnot complete thi~ project at that address.) City/State of previous address [] No (Go to Question 19.) Reason project not completed at previous address 19. What would recipient have done without business subsidy or financial assistance? (Mark one): [] Remain at previous location, but not expand [] Remain at previous location but expand [] Relocate to different Minnesota location [] Relocated outside Minnesota [] Other Section 3: Agreement Information 20. Total dollar value of business subsidy or financial assistance (Please separate value by type in Questions 24 and 25.) (Enter zero for JOBZ, Biozone and Agzone projects.) 21. Date agreement signed (In addition to the agreement date, indicate any dates the agreement was amended.) 22. Benefit date (Indicate the date the recipient receives the business subsidy or improvements were finished, equipment was placed into service, or the recipient occupied the property, whichever is earlier.) 23. Does the agreement provide a business subsidy or one of the four types of financial assistance (see Question 25) required to be reported? (Mark one.) [] business subsidy 24. If the agreement provided a bushess subsidy, please indicate the type(s) and total dollar value for each type. [] not applicable, agreement provided financial assistance [] loan (only principal) rn grant (i.e., forgivable loan) [] tax abatement [] TIF or other tax reduction or deferral [] guarantee or payment [] contribution of property or infrastructure [] preferential use of governmental facilities [] land contribution [] Biozone [] JOBZ (state tax exemptions/credits and sales tax) [] JOBZ - Agzone [] other (Specify subsidy type.) Note: no dollar value for zone projects) 26. If the assistance included tax increment financing, the type of TIF district? (Mark one.) [] not applicable, assistance was not in the form of TIF [] redevelopment [] renewal and renovation [] soils condition rn economic development [] mined underground space [] hazardous substance subdistrict [] financial assistance 25. $ $ [] $ 0 $ 0 [] $ 0 $ If the assistance was one of the four types of financial assistance, please indicate the type(s). not applicable, agreement provided a business subsidy assistance for property by contaminants assistance for renovating building stock or bringing it up to code, and assistance provided for designated historic preservation districts, when 50 percent or less of total cost assistance for pollution control or abatement assistance for a TIF soils condition district please indicate 27. Are any other grantors providing a business subsidy or financial assistance to the same project? (Mark one.) [] Yes (Specify each grantor and the valueof their assistance below; attach an additional sheet if necessary. Grantor Value ($) Grantor Value ($) [] No Minnesota Business Assistance Form (02/01/05) Page 2 o f 5 Dept. of Employment and Economic Development -160- Section JZ: JOZ Information Complete Questions 28-31 if the financial assistance was awarded to a JOBZ qualified business recipient receiving J013z benefits, Cf not, go directly to Question 32.) JZ 1. What was the amount of private capital investment of the business in the JOBZ zone prior to December 31, 2004? Real (land and buildings) $ Personal (equipment) $ JZ2. What was the property tax assessment which was not collected for lhe property where the JOBZ qualified business was operating during the period of January I, 2004 and December 31, 2004? (Please specify each additional parcel identification number and the value of the property tax assessment that was not collected during the period of January 1, 2004 and December 31, 2004; attach an additional sheet if necessary - obtain information from county tax assessor's office.) for Parcel Identification Number: JZ3. What was the value of Wind Energy Production Tax, if any, for the JOBZ qualified business that was operatk~g during the period of January 1, 2004 and December 31, 2004? iection 4: Goals and Public Purpose Identified in the Agreement 28. Minn. Stat. §I 16J.994 requires that business subsidy and financial assistance agreements state a public purpose. Which of the following public purposes were stated in the agreement? (Mark all that apply.) [] Enhancing economic diversity rn Creating high-quality job growth [] Job retention FI Stabilizing the community [] Increasing tax base (cannot be only purpose) [] Other (please specify) 29. Indicate whether the agreement included the following types of goals, and whether the recipient had attained those goals at the time of this report. (Fill in the boxes and attainment date(s) for each goal.) Goals Target attainment All goals established? dates (month & year) attained? A) Specific wage and job goals to be attained within 2 years [] Yes [] No [] Yes [] No B) Other job-creation and/or retention goals []Yes tn No []Yes []No C) Other wage goals [] Yes [] No [] Yes [] No D) Goals other than wage and job goals []Yes []No ~Yes []No Please attach descrption of goals and progress toward attainment (if not documented in Questions 30 and 31. ) 30. For each of the following wage categories, indicate the job creation and/or retention goals stated in the agreement and the average hourly value of any employer-provided health insurance goals for those jobs. (Onlv indicate job creation goals in full-time equivalents if you are unable to separate goals by full- and part-time positions.) Full-time Part-time/ FTE (only if unable to Hourly Wage Job Seasonal/Temp. stated as FT/PT) (excluding benefits) Creation Job Creation Job Creation Job Retention no hourly wage-level goal less than $7.00 $7.00 to $8.99 $9.00 to $10.99 $11.00 to $12.99 $13.00 to $14.99 $15.00 and higher Hourly Value of Health Insurance $ $ $ $ $ $ $ Minnesota Business Assistance Form (02/01/05) Page 3 of 5 Dept. of Employment and Economic Development -161 - 31. For each of the following wage categories, indicate the number of actual jobs created and/or retained since the benefit date and the actual hourly value of any emploser-provided health insurance for those jobs. (Only indicate job creation in full-time equivalents if you are unable to separate job creation into full- and part-time positions.) Full-time Part-time/ FTE (only if unable to Hourly Wage Job Seasonal/Temp. stated as FT/PT) Hourly Value of (excluding benefits) Creation Job Creation Job Creation Job Retention Health Insurance less than $7.00 $ $7.00 to $8.99 $ $9.00 to $10.99 $ $11.00 to $12.99 $ $13.00 to $14.99 $ $15.00 and higher 32. Has the recipient achieved all goals (see Question 33, 34 and 35) and fulfilled all obligations stipulated in the agreement (Mark one.) [21 Yes D No Section 5: Recipients Failing to Fulfill Obligations (Do not complete this section if ?ou completed it on another MBAF submitted to DEED.) 33. During the period Janua'y 1, 2004 through December 31,2004, did your organization have any recipients who failed to report as required by Minn. Stat. §116J.993 and §116J.9947 (Mark one.) Yes (Indicate the name of each recipient failing to report and the value of subsidy or financial assistance awarded to that recipient. Attach additional pages if necessary.) Name of recipient Type of subsidy or assistance (See Questions 24 & 25.' Value of subsidy or assistance ~ No 34. Did your organization have any recipients who failed to achieve any goals or fulfill any other obligations under an agreement signed on or after January 1, 2004, that were required to be fulfilled by the time of this report? (Mark one.) Yes (Complete the remainder of this section.) [21 No (Stop here and submit form to DEED.) For questions 35-39: Provide the following information for each recipient failing to fulfill goals or any other terms of an agreement that were to be attained by the time of reporting. (Attach additional pases if necessary.) 35. Information on recipient and agreement: Name of recipient in default Type of subsidy or assistance Initial value of subsidy or assistance Street address of recipient City/Zip code of recipient Outstanding value of subsidy or assistance 36. Reason(s) for default (Mark all that apply.): ~ recipient ceased operation ~ recipient was unable to fill vacant positions ~ recipient relocated to a different community 121 other (Specify reason.) Minnesota Business Assistance Form (02/01/05) Page 4 of 5 Dept. of Employment and Economic Development -162- 37. To date, has the recipient fulfilled its repayment obligation? (Mark one.) 1221 Yes tn No, recipient has begun to repay the assistance, rn No, recipient has not begun to repay the assistance. 38. Has the agreement been amended to extend the recipient's deadline for fulfilling its obligations? (Mark one.) rq Yes [] No 39. Describe the steps being taken to bring recipient into compliance or recoup the subsidy: Return your completed MBAF(s) by April lv 2005 EITHER Mail To: Minnesota Business Assistance Report Minnesota Department of Employment and Economic Development - Analysis and Evaluation 1 st National Bank Building 332 Minnesota Street, Suite E200 St. Paul, Minnesota 55101-1351 OR Fax To: (651)215-3841 (Next year, please use the online version of this form. It can be found at www.deed.state.mn.us/Community/subsidies/MBAFForm.htm.) Minnesota Business Assistance Form (02/01/05) Page 5 of 5 Dept. of Employment and Economic Development -163- APPENDIX F REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT F-1 -164- -165- -166- APPENDIX G BUT/FOR QUALIFICATIONS But-For Analysis Current Market Value New Market Value - Estimate Difference Present Value of Tax Increment Difference $5,135,705 $100,462,500 $95,326,795 $34,880,425 $60,446,370 Value Likely to Occur Without TIF is Less $60,446,370 Than: The proposed development, in the opinion of the City Council. would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the mcrease in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Mound Harbor Tax Increment Financing District as permitted by the TIF Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: The site is occupied by a former city dump. The proposed development will require remediation of the dump site, demolition of structures (phases 2 and 3) and clearance of the site. Further, based on analysis of the developer's pro forma (see But For Proforma Exhibit G) the City has determined that a gap of $17,000,000 needs to be filled through tax increment in order to make the proposed development financially feasible. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments.for the maximum duration of the TIF District permitted by the TIFPlan: The property could not be sold to another developer for some other use, in that the dump site has to have remediation prior to any use. This cost ofremediation when added to the cost of redevelopment makes any option not feasible. The City has required the developer to abide by a "look back" provision which, measures the actual sales price of the land and costs of land preparation versus the project revenues and costs. If the developer achieves a higher than market rate return, the amount of TIF assistance will be reduced. Therefore. the City concludes as follows: The City's estimate of the amount by which the market value of the entire District will ~ncrease without the use of tax increment financing ~s $0. If the proposed development occurs, the total increase in market value will be $95,326,795 (see table above). G-1 -167- do The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $34,880,425. (see table above) Even if some development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $60,446,370 (the amount in clause b less the amount in clause c) without tax increment assistance. G-2 -168- Mound Harbor Renaissance Sources and Uses SOURCES Tax Increment GO Bonds (Dump Clean Up) TIF Revenue Bonds TIF Revenue Notes Grants Land Payment 3,400,000 10,210,000 3,425,O00 830,000 14,600,000 Total Sources USES Land Acquisition Relocation Design and Development Site Preparation Environmental and Wetlands Public Improvements Streets and Sidewalks Parking Ramps/Decks Other Improvement costs Capitalized interest Mgmt Fee Lost Lake Dump Remediation Total Sources Profit 32,465,000 9,400,000 1,120,000 1,400,000 3,400,000 730,000 1,040,000 1,008,000 2,830,000 2,250,000 1,400,000 1,000,000 3,400,000 28,978,000 12.03% 3,487,000 -169- APPENDIX H PRIOR IMPROVEMENTS H-1 -170- 02/16/2005 12:27 F~ 9524720820 CITY OF ]fO[TND ~007 5341 BUILDING pERMIT CITY OF MOUND Maywood Road, Mound, MN PArD 5536~CT ~L 5 Phone: 952-472-0600 Fax: 952-472-062.~T~oF~OU~D · Site TenanqBuilding Name The applicant is: ~J'/~own°r contractor ~tonant " Owner Address -571~ [~'~)~- ~ ': Contractor Phone (Office) (O~her) ' " Legal Lot Block ' ',. Description Addition .... CONDITIONS ::ESTIMATED VALUE .:.ZONING DISTRICT: R1 RqA R2 R3 B1 B2 B3 ',.'NOTIC. E..'.~, Separate permits are required for ele;tricai, ~plumblng, heating, ventilation or air conditioning. This ~permit' I~eoom~s null and void if. work or construction ;'~uthori~'ed is not commenced within 180 days, or if ,'. ;onsttuetion or wo[k is suspended or abandoned for a · ~.peripd of'180 days at any time after work is commenced. '::!'All ~ work must be ~ompleted within one (1) year from the 'date of permit issuance, according to City Code Secfion~300:10, Subd. 5, i heteby'.certify that I have read and examined this ',~.pplieafion and know the same to be true end correct. All provisions of laws and city ordinances governing this type "of work will be complied with whether specified herein ,;~iolate ~r' cancel the provisions of any other state or local i!aw regulating consttuctlon or the performance of ; c. onsttucti~n. DRAINTILE ....... ' .................... $ S.A.C. (09%) ......................... S.A.C. 0%) ........................... $ CITY SEWER CONNECTtON ,..$ CITY WATER CONNECTION .,.$ WATER METER .................... $ WATER TRUNK CHARGE ....... $_ $ ' ,~pprovec '- Applicam 101r32210' 101-~4104 10~-32230 602-21825 '$02~2~ 601-37144 801-3719~ Date Date White-Finance Copy Canary-lnepector'~a CoPlV Pink-File Copy Oold-Appllcant's Receipt 1:'61'70. -171 - 02/16/2005 12:27 FAX ADDRESS PIN LEGAL DESC PERMYr TYPE PROPERTY TYPE CONSTRUCTION TYPE VALUATION 9524720620 CITY OF HOUND CITY OF MOUND 5341 MAY'WOOD ROAD MOUND, MN $5364- (95.2,) 472-0607 FAX: (952) 472-0679 RBPRIN'rP_D ON 2/8/2OO5 : 5533 SHORELINE DR : t 311724330076 : AUDITOK'S SUBD. NO. 170 LOT. 0 BLOCK 0 BUILDINO COMMA'RCL~L : DOORS : $ 0.00 ~]008 PE~ NO.: 2004-00732 DA'I~E ISSUED: 10/27/2004 APPLICANT CITY OF MOUND 5341 MAYWOOD RD MOUND, M_N 55364 CITY OF MOUND 5341 MAYWOOD RD MOUND, lVIN 55364 AGI~EE~NT AND SWOl~ STATEMENT This permit become~ null aud void if work or construction authorize~i i~ not commenced wltbfn 180 days, or if consWacfiou or work is auspended or abmadoued for a period of J 80 days at any gme after work is commenced- I hereby certify that I have read and e~nmi-ed this applicntion a~d know the s~me to be true and correct. All proviaionz of laws and city orai-.-c~s governing this type of work will be compiled with whether specified herein, violat~ or cancel the provision~ of any other stnt~ or local law r~dntin~ construction or the pefformauce of construction. Applicant ~' Dar~ BUILDING PER_MIT FEE 101-32210 TOTAL 0.00 0.00 SEPARATE PERMITS RBQUIRED FOR WORK OTHER THAN DESCRIBED ABOVE. -172-